Asian growth forecast undeterred by tsunami


Sun, Jan 23, 2005 - Page 10

Southeast Asia's economic growth forecast for this year has been underestimated, with the global scenario less gloomy than anticipated, and a soft China slowdown expected, research house Morgan Stanley said in a report yesterday.

The tsunami disaster inflicted minimal damage on the economic outlook of Indonesia, Thailand and Malaysia, the firm said, and reconstruction prospects are bright.

Morgan Stanley held out the possibility that Indonesia, worst-hit by the killer waves on Dec. 26, may achieve GDP growth of 5 to 5.3 percent for this year, up from the firm's earlier forecast of 4.5 percent.

The potential for Thailand is 6 to 6.2 percent, up from 5.7 percent previously anticipated. Malaysia may reach 5.3 to 5.8 percent, up from the earlier 4.8 percent forecast.

"Prompted to help their people rebound from the effects of the tsunami, governments could focus on actively reviving growth through a structural life in their domestic investment strategies," Morgan Stanley said.

Cyclical domestic demand remains firm, it added.

In Singapore and Malaysia, the sharp rebound in exports and economic growth has been supporting a recovery in household income and confidence, private consumption and employment.

The upside potential for GDP growth also extends to the Philippines with Morgan Stanley citing the possibility of achieving 4.8 to 5.5 percent growth, compared to the earlier forecast of 4 percent.