Magazines Archives - 2008 December

Asia arms itself against the weakening world economy
Story 2 - News Feature

GOVERNMENT INTERVENTION HAS BECOME NECESSARY FOR ASIAN ECONOMIES TO WEATHER THE GLOBAL ECONOMIC STORM, AND SPURRING DOMESTIC SPENDING HAS BECOME THE WEAPON OF CHOICE. FROM APPROVING FISCAL INCENTIVES TO EASING MONETARY POLICIES, ASIAN ECONOMIES ARE DOING EVERYTHING TO MAKE ITS CONSTITUENTS GO OUT AND SPEND. JENNEE GRACE U RUBRICO REPORTS.

As concerns over the impact of the global financial crunch continue to mount, Asian governments have started putting in place measures that seek to limit the contagion of the crisis on their respective economies.

Policy changes — ranging from intervention by monetary authorities to approving fiscal packages aimed at stimulating domestic spending — are being imposed one after the other by countries in a region that is starting to feel the pinch of the economic slowdown of traditional trading partners.

Asian countries have revised economic growth forecasts downward in response to the upheavals that started in the US and spread to the rest of the world.

The China Chengxin International Credit Rating Co has announced that China, which has seen a slump in its exports sector, will likely see its gross domestic product (GDP) — a measure of its economy — posting a single-digit growth of 9.4% this year from last year’s 11.%. Singapore, also heavily dependent on external trade, has revised its growth outlook to 3% from the initial forecast of 4%-5%.

Malaysia has likewise pre-empted a bleak economic scenario for 2009 by revising its GDP outlook for the year to 3.5% from 5.4% as its government warned that it would not be immune to the effects of the global financial crisis.

Indonesia is expected to also announce a cut in its economic growth following deputy central bank governor Hartadi Sarwono’s pronouncements that it would be “tough” to grow over 6% next year given the current global economic conditions.

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