Asian growth foreseen

Press, 20 February 1980, Page 29

Asian growth foreseen

NZPA-Reuter Singapore Developing Asia promises to be theworlds primary growth area in the 1980 s, in spite of some serious obstacles which must be overcome, the economic research department of the Chemical Bank of New York has said.

Developed Asia — Japan, Australia, and New Zealand — was expected to achieve an average annual growth rate of 4 per cent this year, while Asia’s 10 biggest developing nations would have a higher rate of 5.2 per cent, the bank said in a report on Asian economic trends. It cited Asia’s comparatively strong rates of per capita income growth and the size of its market as factors underlining the area’s vast potential.

However, for 1980, in particular, Asia would in general confront a tough year in the face of economic slowdowns in the industrialised world and the second wave of big increases in the price of oil since 1973.

Real growth in Asia slowed somewhat in 1979, and should decelerate again this year, the bank said. At the same time, consumer price inflation would increase and current account deficits would rise sharply. Economic growth would be restrained by developments abroad and domestic attempts to reduce inflation and improve external balances. The bank said that the fastest-growing economies in 1980 would be those of Hong Kong, Indonesia, Malaysia, and Singapore.

The most dramatic slowing in growth would occur in South Korea, where last year’s rate of more than 7 per cent would be followed by an over-all growth rate of about 3 per cent in 1980.