Asia's growth to slip in 2005
Milan (AsiaNews) Asia's projected economic growth for 2005 is 4.4 per cent, down from last year's 5.8, this according to Michael Spencer, the Deutsche Bank's chief economist for Asia, who spoke at a recent meeting in Singapore.
According to the German bank's official, a slowdown in the US economy will impact on Asia's exportsslower US economic growth is likely to translate into lower export orders for the region which counts the US economy as a major customer.
"Roughly speaking, the more open the economies, the faster the pace of deceleration as export growth weakens," Mr Spencer said.
"With the US in particular expected to slow down we do see growth in this region weakening faster than in the US," he added.
The bank's growth projections for Asia this year exclude China, Japan and India. China's growth in 2005 is tipped at 8.4 per cent compared to 9.3 per cent last year, whilst Japan, the world's second largest after the United States, is expected to grow 1.7 per cent against 2.9 per cent in 2004. However, the bank is ruling out the possibility of Japan might slip into another recession despite signs of slowing economic growth.
According to the Deutsche Bank's World Economic Outlook for 2005 Report, "concerns about a deteriorating external environment, such as the fragility of the export-driven recovery, higher oil prices and a yen appreciation, appear exaggerated to us".
Other economists contacted by AsiaNews are less optimistic, pointing to the weakness of some US mortgage concerns (last December Fannie Mae's top officials were forced to resign because of rule violations that might deflate the company's earnings by as much as US$ 9 billion), which might provoke a collapse of the US real estate market..
Should this happen, world financial markets might suffer greatly, perhaps in autumn, and the fast-paced run of Asia's economies might come to a screeching halt in 2005.
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