Southeast Asia to barely grow in 2009 - ADB

31 March 2009 05:54  [Source: ICIS news]

SINGAPORE (ICIS news)--Southeast Asia will just log in a 0.7% annual growth this year with three major economies in recession because of the exports slump, the Asian Development Bank (ADB) said on Tuesday.

It was a sharp deceleration in growth from the 4.3% clip in 2008 as the global financial and economic problems proved too big for the region to withstand unscathed.

The forecasts are contained in the multilateral institution's Asian Development Outlook 2009 (ADO 2009) report, which underscored the risks because of the region’s “excessive dependence” on external demand.

Exports had been driving Asia’s robust economic expansion over the years but with the collapse in demand, this pillar of strength gave way and made the region vulnerable to the economic downturn.

“The short term outlook for the region is bleak as the full impact of the severe recession in industrialized economies is transmitted to emerging markets,” said Jong-Wah Lee, acting economist at ADB, in a statement.

Based on the report, Singapore’s economy will shrink 5.0% this year, Thailand’s economy will contract 2.0% and Malaysia’s economic output will slipped 0.2%.

The Philippines, Indonesia and Vietnam are expected to continue growth but at a much slower pace this year.

Asia has always counted the US and Europe as major end-markets for its products.

“The concern for the region, and especially for the region’s poor, is that it is not yet clear that the US, European Union and Japan will recover as soon as next year,” said Lee.

In east Asia, Taiwan is expected to record a 4.0% decline in economic output while the South Korean economy will contract by 3.0% this year, according to the ADO 2009 report.

Those with strong domestic economies will fare better as in the case of China and India, with GDP growths projected at 7.0% and 5.0%, respectively, although still lower compared to 2008, the report noted.

For the whole of developing Asia, GDP growth will slow to an annual pace of 3.4% this year from 6.3% in 2008.

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By: Pearl Bantillo
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