Fri, Dec 20, 2002 - Page 11 News List

Terror, expensive oil may cut growth in Asia, UN warns


Asian economic growth next year could be hampered by the threat of terrorist attacks, stock market declines and rising oil prices resulting from a possible war in Iraq, a UN official said yesterday.

"We are facing too many uncertainties and threats," said Kim Hak-su, head of the UN Economic and Social Commission for Asia and the Pacific, or ESCAP, at a press conference announcing the release of an economic report for 2002/2003.

He said that ESCAP, the UN's largest regional agency, predicted positive growth in Asia next year barring rapid inflation in the energy sector, "no big disorder in the financial markets and no terrorist attacks."

Asian countries such as Thailand are highly dependent on oil imports and therefore sensitive to fluctuations in global energy prices.

Kim said that growth in the influential economies of the US and the EU, however, is expected to decline because of scandals at corporations such as the US energy giant Enron, the depreciation of the dollar and unemployment.

China will lead Asia's growth, Kim said, noting that the region's second-largest economy would provide significant demand in the construction sector ahead of the 2008 Olympics to be hosted by Beijing.

Low interest rates and household spending in countries such as South Korea, Thailand and Singapore have contributed to recent domestic growth, he said.

While overall Asian economic growth this year was stronger than last year thanks to greater intra-regional trade and domestic stimulus measures, several factors could jeopardize further expansion.

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