Asian economy to slow down in 2005

Agence France Presse

Singapore, January 12:

Asia’s export-led economies in 2005 will see growth slip to 4.4 per cent from 5.8 per cent last year as the US economy, the engine of global growth, slows down, Deutsche Bank said today.

At a one-day regional outlook forum, the German bank said slower US economic growth would likely translate into lower export orders for the region which counts the the world’s biggest economy as a major customer. “Roughly speaking, the more open the economies, the faster the pace of deceleration as export growth weakens,” Michael Spencer, the bank’s chief economist for Asia, said, “With the US in particular expected to slow down. We do see growth in this region weakening faster than in the US.”

The bank’s 4.4 per cent growth projections for Asia this year excludes China, Japan and India.

Chinese economic growth in 2005 is tipped at 8.4 per cent versus 9.3 per cent last year while Japan, the world’s second largest after the US, is expected to grow by 1.7 per cent after 2.9 per cent. The bank is rules out the possibility of Japan slipping into another recession despite signs of weakening economic growth. “The current slowdown in our view is unlikely to lead to another full fledged recession,” Deutsche Bank said its 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,” it said.