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Monday, 10 February, 2003, 07:04 GMT
Asian growth to be hit by Iraqi war
Beach trader
War fears dampen economic enthusiasm in Asia
The Asian Development Bank (ADB) has cut its 2003 economic growth forecasts for East Asia because of the impact of possible war on Iraq.

And for the past year - with the 2002 statistics still being finalised - the regional aid donor now predicts an average growth rate of just 5.6%, down from its previous forecast of 6.1%.

It had predicted that in 2003 the economies of Brunei, Cambodia, China, Indonesia, South Korea, Laos, Myanmar, Malaysia, the Philippines, Singapore, Thailand and Vietnam would grow by an average of 6%.

The uncertainty over Iraq has weakened business and consumer confidence, push oil prices to two-year highs and undermined the health of the main exporting markets for the region, the US, Europe and Japan, the ADB said.

Sour environment

"There was a slowdown in the momentum of export growth in the second half of last year, largely reflecting a souring global economic environment," the bank's Regional Economic Monitoring Unit.

The US and Britain are threatening to go to war with Iraq if they are not satisfied it has complied with United Nations resolutions to disarm.

The ADB revised downwards 2003 growth forecast for Singapore from 4.7% to 3.8%, South Korea from 5.6% to 5.0%, Malaysia from 5.2% to 4.7%, and Indonesia from 4.0% to 3.6%.

Forecasts for China of 7.5%, Thailand's 4.1% and Philippines' 3.9% were left unchanged.

See also:

09 Feb 03 | Business
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30 Jan 03 | Business
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