East Asian economic growth will accelerate this year as exports speed up and commodity prices rise, although a worsening recession in Japan may cloud the region's recovery, the World Bank said in its semi-annual outlook.
Economic growth in East Asia, excluding Japan, will average 4.7 percent this year, up from 3.5 percent in 2001, the bank said.
Growth will be lower than 7.6 percent in 2000.
"The emerging recovery is supported in part by a stronger than expected rebound in the US economy, in demand for high tech products, and in world prices for important East Asian exports," the bank said in its report.
A recovery in export volumes and prices is key to economic growth in the region. While last year's slump in US demand for the region's semiconductors, disk drives and other electronic parts hurt the economies of the Philippines and South Korea, falling prices of agricultural commodities such as coffee, rice and rubber hurt Indonesia, Malaysia and Thailand.
The bank estimates Thailand and South Korea lost about 3 percent of their national income between 1998 and 2001, as prices for non-oil commodity exports from developing countries slumped by a third.
The World Bank repeated its March forecast that the Japanese economy will shrink 1.2 percent this year, three times the pace at which it contracted last year, threatening to drag down growth in its trading partners in East Asia.
What's more, factory investments in the region are being held back by the under-utilized capacities that were created in early 1990s, the bank said.
Although the US, which buys a quarter of Asian exports, is growing again after last year's recession, its widening current account deficit raises concerns that ``at some point foreign investors may balk at financing a further large increase in the deficit, reducing the US role as the locomotive of world demand and trade,'' the bank said.
* Growth in 42 Asian economies, excluding Japan, may rise to an average 4.8 percent from 3.7 percent last year.
* The World Bank forecasts that growth in China will slip to 7 percent this year from 7.3 percent last year.
* The Thai economy may expand 3 percent 1.8 percent growth last year.
* The Malaysian economy, which grew 0.4 percent last year, will probably expand 3 percent, the bank said.
* Growth in South Korea may accelerate to 4.2 percent from 3 percent.
* In the Philippines, the economy is likely to expand 4 percent this year, faster than last year's 3.4 percent.
The US current account deficit may widen to almost 5 percent of its gross domestic product this year from 4 percent last year, New York Federal Reserve Bank President William McDonough said last week.
The bank forecasts that growth in China will slip to 7 percent this year from 7.3 percent last year. Growth in South Korea will accelerate to 4.2 percent from 3 percent. In the Philippines, the economy is likely to expand 4 percent this year, faster than last year's 3.4 percent.
Growth will also speed up in Southeast Asia, with the Thai economy forecast to expand 3 percent after a growth of 1.8 percent last year. The Malaysian economy, which grew 0.4 percent last year, will probably expand 3 percent.
Meanwhile, the Asian Development Bank also forecast yesterday that while Asian economic expansion will accelerate this year as trade rebounds, a recovery might be undermined by a sustained increase in oil prices.
Growth in 42 Asian economies, excluding Japan, will rise to an average 4.8 percent from 3.7 percent last year, the bank said in its annual outlook. Growth will be higher than a November forecast of for 4.2 percent, although it will lag the 7 percent pace in 2000.
A revival in US demand for semiconductors, disk drives and other computer parts is crucial for most Asian economies, which rely on the world's No. 1 economy to buy a quarter of their exports. Singapore and Taiwan fell into recession last year as shipments tumbled.
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