OSAKA -- The economy of the Pacific region will register a recession in 1998 because of the Asian financial crisis, the Pacific Economic Cooperation Council predicts in its annual forecast released Tuesday.
"With average growth of gross domestic products forecast at only 2.5 percent, almost 2 percent less than 1997, 1998 is best characterized as a recession year," the PECC said in its report. Among 20 countries in the Pacific region, five nations will have minimal economic growth, while Australia and Colombia are expected to achieve growth faster this year than in 1997, the report says.
The PECC pointed to the ongoing Asian financial crisis as the major force depressing the region. Fiscal policy errors by Japan in 1997 are listed as the second most depressing factor.
If the region's economy begins to recover by the end of this year, 1999 could be a recovery year, with the region's GDP growth increasing to 3.5 percent, the report says. The annual rate of increase in consumer prices in 1998 will be up only 0.5 percent from the 1997 figure, the forecast says.