East Asian economies are forecast to expand at the slowest pace in eight years next year as easing export demand and declining investment and consumer spending portend “hard times” for the region, the World Bank said.
East Asia, excluding Japan, is expected to expand 5.3 percent next year, slower than the 7.4 percent rate the World Bank predicted in April. Growth for this year is estimated at 7 percent, the Washington-based lender said its semi-annual report yesterday.
Fiscal stimulus and coordinated interest rate cuts by governments and central banks around the world have failed to reverse a worldwide economic slump and the worst credit crunch in seven decades.
The World Bank on Tuesday lowered its global growth projections, and predicted international trade would shrink next year for the first time in more than 25 years.
“The contraction of output in the developed economies may well last longer and run deeper, delaying a recovery in growth in East Asia,” the bank said. “In the near term, downside risks are substantial.”
The World Bank in April said inflation would pose a greater threat to the East Asia region than the global slowdown this year. As crude oil and commodity prices fall from record levels, and consumer price gains peaked, it is now pointing to a worsening economic outlook.
WEAK EXPORTS
“Prospects for weaker exports, together with a projected decline in capital inflows, will constrain investment spending,” it said.
“Private consumption is likely to be hit by more sluggish earnings, higher levels of unemployment, the reduction in household and corporate wealth and an increased desire to save in uncertain times,” it said.
Asian governments and their counterparts around the world are spending hundreds of billions of dollars to protect their economies from the global financial crisis. Slowing inflation will allow the governments to boost growth through expansionary fiscal measures, the World Bank said.
“A number of countries in East Asia have some room to loosen policy, as fiscal positions have generally improved in recent years,” the bank said.
“To ensure fiscal stimulus packages achieve their objective of generating demand and jobs in the domestic economy, such packages will need to be well-targeted and temporary in duration,” it said.
The World Bank said developing East Asian economies would be more resilient during the slowdown compared with other emerging-market regions such as Latin America, which it projects will grow 2.1 percent next year.
“East Asia is expected to do better than the other developing regions in the world” by growing 4 percent to 5 percent next year, Vikram Nehru, the bank’s chief economist for East Asia, said in an interview on Monday. “That’s not spectacular, but still reasonably good.”
CONTRIBUTION
East Asia likely contributed to a quarter of global growth this year, and that could rise to a third next year, the World Bank said.
“The countries in the region will be better positioned to deal with the crisis to the extent that they are able to maintain macroeconomic stability, shift exports to faster growing regions in the world, substitute external with domestic demand, and continue with their structural reforms to strengthen competitiveness,” the report said.
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
LANDSLIDES POSSIBLE: The agency advised the public to avoid visiting mountainous regions due to more expected aftershocks and rainfall from a series of weather fronts A series of earthquakes over the past few days were likely aftershocks of the April 3 earthquake in Hualien County, with further aftershocks to be expected for up to a year, the Central Weather Administration (CWA) said yesterday. Based on the nation’s experience after the quake on Sept. 21, 1999, more aftershocks are possible over the next six months to a year, the agency said. A total of 103 earthquakes of magnitude 4 on the local magnitude scale or higher hit Hualien County from 5:08pm on Monday to 10:27am yesterday, with 27 of them exceeding magnitude 5. They included two, of magnitude
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique