Asian Economies To Grow 5.5%, Short-Term Risks Seen

By Agence France-Presse Asia-Pacific economies are expected to grow faster than other regions in the next five years but expansion could be disrupted in the short term, a report by the Economist Intelligence Unit (EIU) said Aug. 25. In its latest projections, EIU predicted that gross domestic product (GDP) in the Asia-Australasia region excluding Japan will enjoy the fastest average annual expansion rate of 5.5% in 2003-2007 compared with other areas. But the performance will be a shadow of the growth experienced before the 1997-1998 Asian financial crisis, the EIU said. In the near term, the projected improvement in the region's performance is due to the brighter outlook for the global economy, particularly that of the U.S., which is a major market for Asia's export-dependent economies, it said. However, a number of risks threaten to halt Asia's upward momentum, the EIU said. These include a resurgence of the Severe Acute Respiratory Syndrome (SARS) epidemic, a slowdown in U.S. consumer spending and continued sluggishness in Organization for Economic Cooperation and Development (OECD) members, it said. "World economic performance has improved in recent weeks . . . nevertheless, there remain serious problems in some of the world's largest economies, and our upgraded forecasts still suggest that the OECD will take until late 2004 to reach even a trend pace of growth," the EIU said. Copyright Agence France-Presse, 2003