Asian economies on the mend

Singaporeans may have more to cheer soon

While many of Asia's economies are stagnating or deep in recession, anecdotal evidence emerges from Singapore, Taiwan, South Korea and Australia that a recovery could be under way.

Singapore's economy, which has seen its exports collapse and the economy suffer its worst recession in 37 years, can finally hope for an end to the downturn.

Non-oil exports in January still fell 4.1% from a year ago, but the data were much better than the 16.7% plunge experienced in December, and much more favourable than the 10% decline forecast by economic analysts.

"We are on the path to recovery" said one economist, predicting a return to growth during the second quarter of the year.

Singapore's economy, however, is still smarting from a sharp contraction during the past year. During 2001, its gross domestic product fell 2.2%.

This compares with a 9.9% expansion during the boom time a year before.

But the 2.2% drop is less than the 3% contraction predicted by the government less than half a year ago, and in recent weeks, the government has become increasingly confident about the economic outlook.

Until recently it predicted the downturn would continue well into 2002. Now Prime Minister Goh Chok Tong says he hopes for annual growth of 1-3%.

Taiwan recovery

In Taiwan, meanwhile, officials are busy raising the growth target as well.

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According to a report in the China Times, the Directorate General of Budget, Accounting and Statistics plans to revise this year's growth forecast to 2.5%, and ponders to push it as high as 3%.

Until now the growth forecast was just a nudge above 2%.

The official figures are expected to be released on Friday.

Last year, Taiwan slipped into a recession - defined as six months of a shrinking economy - for the first time since 1951, when the island's government began to take economic measurements.

On 1 January Taiwan joined the World Trade Organisation. This is expected to put a lot of domestic industries - especially farming - under huge pressures, but is believed to ultimately give an economic boost through export earnings.

South Korea's unemployment lines shorten

South Korea's economy had a good start to the new year as well, with unemployment (on a seasonally adjusted basis) down to 3.2% in January - a four year low.

Analysts expect that the economic recovery in the United States will help South Korea to pull through the global slowdown unscathed.

Exports have fallen sharply in recent months, but domestic spending was strong enough to sustain the economy, which is believed to have grown about 3% last year.

Many other Asian countries fell into recession during 2001.

South Korea is Asia's third largest economy, and suffered terribly during the Asian financial crisis in the late 1990s. Massive corporate restructuring and economic reforms helped the country to prepare for the latest slowdown.

Buoyant Australia

During the past year Australia has been the big surprise among Asia's economies.

After a poor start to 2001, the country managed to outperform most of its neighbours, and looks set to continue on this path.

The economic prospects are "pretty good" , according to Glenn Stevens, deputy governor of the Reserve Bank of Australia.

In the first major speech by an Australian central banker this year, Mr Stevens told the Committee for Economic Development of Australia - an economic policy think tank - that "the economy has clearly coped with the international downturn pretty well so far, and there are good reasons for confidence about its performance over the coming year".

However, Mr Stevens sounded a note of caution, saying that the biggest threat to the world economy might well be Japan.

US President George W Bush, who is currently on a state visit in Tokyo, underscored this argument, saying Japan's economic recovery was "important not only for our bilateral relations, it'll help the region and it will help the world".