The Asian Development Bank is significantly lowering this year's economic growth forecasts for the region. The bank is pessimistic about a quick economic rebound, as the attacks in the United States and the war in Afghanistan pressure an already fragile world economy.
Seven months ago, the ADB said Asia's developing economies would feel the effects of a global slowdown in the information technology sector throughout 2001. Then, the regional lending institution predicted that economic growth would slow to just over five percent from seven percent the year before.
Then came the terrorist attacks in the United States on September 11th. The attacks severely disrupted trade and have dramatically cut global consumer demand.
The ADB now says Asia's developing countries could see anemic growth of only 3.4 percent. Brahm Prakash is the ADB's assistant chief economist. "Trade is the major issue," Prakash continues. "We had a trade growth in 2000 of 20 percent plus. But this year we are running negative five percent."
Mr. Prakash says plummeting exports will most affect the so-called Asian tiger economies of South Korea, Hong Kong, Taiwan and Singapore. He says they could see their export growth drop by more than half from last year's figures. The ADB expects Taiwan to suffer the worst of the export downturn, with exports declining 15 percent. Last year, Taiwan's exports grew nearly 22 percent.
The bank says it is hoping for a modest economic rebound next year in the United States, Japan and Europe's euro zone. They buy half of the exports from the region.
The ADB says that rebound, combined with sound economic policymaking, could give Asian economies a boost by the third quarter of 2002.