East Asia is expected to stage a stronger economic rebound in 2002 than was anticipated six months ago, the World Bank said Wednesday. However, the Washington-based institution remained cautious about whether the recovery, based on brisk exports, will be sustained.
In its half-year report on East Asia and the Pacific, the bank revised upward its growth outlook for East Asia in 2002 to 5.4 percent from 4.7 percent in April, and that for Japan to minus 1 percent from minus 1.2 percent.
In 2001, East Asia saw 3.5 percent growth, with Japan posting a 0.3 percent contraction, the report says.
But citing such uncertainties as the plunge in stock markets worldwide, the World Bank revised downward its outlook for growth in East Asia in 2003 to 5.5 percent from 5.6 percent in April and that for Japan to 0.8 percent from 1.7 percent.
The World Bank said it projects the Southeast Asian economy will grow 3.6 percent in 2002 and 3.9 percent in 2003 following a 2.3 percent gain in 2001.
The economies of Hong Kong, Singapore and Taiwan are expected to see 4.4 percent growth both in 2002 and 2003, after just 0.7 percent growth in 2001.
China is forecast to see growth of 7.7 percent in 2002 and 7.5 percent in 2003, following a 7.3 percent rise in 2001.
Growth for South Korea is forecast at 6.1 percent in 2002 and 5.5 percent in 2003, after a 3 percent rise in 2001.
The growth in 2002 was supported for the most part “by stronger exports and household consumer spending, supportive monetary policies, and in several cases, expansive fiscal policies,” the report says.
“Yet, worries about the strength and durability of the recovery have also grown,” it adds, pointing out risks such as weaknesses in major developed countries — the United States, Japan and those in Europe — and a sharp rise in oil prices.
Recent terrorist attacks in Southeast Asia, including the deadly bombings on Indonesia’s resort island of Bali, will depress tourism and business confidence in the short term, the report says.
“We see an accumulation of risks,” Homi Kharas, the World Bank’s chief economist for East Asia and the Pacific, told reporters. “The balance of risks to the outlook is still very much on the downside.”
As prescriptions for the region, the World Bank said countries should improve public security, strengthen governance and take steps to bolster the investment climate.
“East Asian countries can make progress even in these uncertain times by continuing to lay stress on some core fundamentals,” the report says.
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