"Emerging Asia is in fact the strongest growing
region of the world at 6.0 per cent for 2003 and 6.3 per cent for 2004,
although we do not view this recovery as self-sustaining if the rest of
the world slumps," IMF chief economist Kenneth Rogoff told a news
Chinese gross domestic product growth would ease from
8.0 per cent last year to 7.5 per cent both this year and next.
Growth in newly-industrialized economies — Hong
Kong, South Korea, Singapore and Taiwan — would dip from 4.6 per cent
last year to 4.1 per cent in 2003 and rise to 4.5 per cent in 2004.
Growth in Southeast Asian nations — Indonesia,
Malaysia, the Philippines, and Thailand — would ease from 4.3 per cent
last year to 3.9 per cent this year before recovering to 4.3 per cent
In South Asia — Bangladesh, India and Pakistan —
growth would rise from 4.7 per cent last year to 5.1 per cent in 2003
and 5.8 per cent next year.
In Vietnam, growth would climb from 5.8 per cent last
year to 6.2 per cent this year and 7.0 per cent in 2004.
The Middle East economies, which includes the Gulf
oil states as well as the poorer Mashreq area, saw growth slip to 3.9
per cent last year, but should see an improvement to 5.1 per cent this
year and 4.8 per cent expansion in 2004, the IMF said in its World
The IMF predicted 5.8 per cent growth this year for
the oil exporting countries in the region, including Saudi Arabia,
Kuwait and Iran, while the Mashreq countries of Egypt, Jordan, Lebanon
and Syria would see average growth of just 3.1 per cent.
IMF WARNS OF WEAK WORLD ECONOMY
The IMF's semi-annual world economic forecast says
the world faces another year of sub-normal growth.
The International Monetary Fund (IMF) has sharply
revised downwards its forecast for economic growth for 2003, and says
that it is unlikely that the "sputtering global growth will
suddenly lunge ahead into an immediate strong recovery."
It is forecasting world growth of 3.2% this year, and
4.1% next year, down 0.5% in 2003 from previous forecasts.
Kenneth Rogoff, the IMF's chief economist, told the
BBC that there had been some "collateral damage" from the war,
which damaged consumer and business confidence, and that the fall-out
from the collapse of stock prices was still affecting the world economy.
Mr Rogoff also warned that there were some
longer-term risks to the world economy from the more uncertain world
He said that average world growth could be reduced by
around 0.25% because of the greater insurance costs and the reduction in
global trade, which was putting "sand in the wheels of
The worries about world security since September 11
could also affect business investment and reduce migration, he argued.
And the greater military spending could have reduced
the "peace dividend" that allowed countries to reduce their
budget deficits and spend more on social programmes.
Mr Rogoff also expressed worries about the US budget
deficit which was "unsustainable" in the medium term.
He said that, although he was "sympathetic"
to the idea of eliminating the double taxation of dividends, the Bush
administration plan for a $726bn tax cut was "awkwardly
timed", given the "open-ended commitment" to spending on
security and reconstruction in Iraq and possibly elsewhere.
UK TRADE DEFICIT SOARS
The UK's trade deficit with the rest of the world has
widened more than expected as exports to the United States and Saudi
Arabia fell sharply in February.
Figures from the Office For National Statistics (ONS)
said the UK goods trade deficit reached £3.7bn in February, compared
with £3.2bn in January.
Analysts had predicted a deficit of about £3.3bn.
ONS blamed the gap on trade with countries outside
the European Union and economists warned that the situation was likely
to get worse before it gets better.
Overall exports were down almost 5% in February but
imports also fell by 1.5%.
The result was a trade gap of £2.4bn with countries
outside the EU, up from £2bn in January.
Within Europe, the trade gap fell only slightly from
£1.2bn to £1.25bn.
SCHROEDER BLAMES WAR FOR WOES
German Chancellor Gerhard Schroeder has blamed the
Iraq war for crushing global economic growth, as the European Commission
prepares to cut its growth forecasts.
"It can already be seen that the war in Iraq has
increased the economic uncertainties worldwide, and some of the hopes
for economic growth have been impaired, if not entirely destroyed,"
Mr Schroeder said in a speech last week.
The Commission is expected to cut euro zone growth to
1% from the previous 1.8%, blaming the war on Iraq.
The target for Germany, the largest economy in the
euro zone, is expected to slashed 0.4% from 1.4% for 2003 and to 2% from
2.3% for 2004.
SURPRISE RISE FOR UK MANUFACTURING
UK manufacturing has staged an unexpected upturn for
the second month in a row, prompting suggestions that the sector may be
in better shape than feared.
Figures from the Office for National Statistics (ONS)
suggested manufacturing output rose by 0.3% in February from January.
The figures were a welcome surprise from predictions
of a 0.3% slide.
Economists said the figures spelt good news for the
"It will help the chancellor give a less
downbeat assessment of the UK economy," said Philip Shaw, chief
economist at Investec bank in London.
BROWN CUTS UK GROWTH HOPES
Chancellor Gordon Brown has cut his predictions for
UK economic growth and announced an increase in government borrowing.
Unveiling his seventh budget, the chancellor also
outlined measures that see greater taxes for smokers and drinkers, a new
"baby bond" and benefits for pensioners.
Despite cutting his growth forecast, Mr Brown
remained bullish over prospects for the UK economy. He said Britain was
in a much stronger position than other countries amid the global
Treasury officials said the overall economic impact
of the Budget was neutral and, as most economists expected, there were
no major tax rises or giveaways announced.
The chancellor said economic growth this year would
be between 2% and 2.5% compared with his prediction in November for
He said government borrowing this year would be
£27bn — up £3bn on his earlier prediction.
MARKETS RETURN TO REALITY
With Iraq now firmly on the back-burner as an
incentive to trade, markets in Asia have slid for the second day as
pre-war worries about the global slowdown returned.
The damage wrought by the Sars respiratory virus
continued to take its toll as well, as a diplomatic row brewed between
Malaysia and Hong Kong over cancelled flights.
Last week, the Tokyo Nikkei 225 had slumped to fresh
20-year lows with a fall of more than 2% to 7,816 as big corporate
pension funds sold shares, with Hong Kong's Hang Seng down 0.5%.
BANK KEEPS UK RATES ON HOLD
The Bank of England has left interest rates on hold
at 3.75%. The Bank's Monetary Policy Committee resisted pressure from
industry for a further rate cut to kick-start sluggish economic growth.
The decision comes despite evidence of flagging
consumer confidence and a recent flood of gloomy economic data.
Chancellor Gordon Brown was forced to cut his growth
predictions and increase government borrowing.
HOUSE PRICES JUMP IN THE UK'S NORTH
A new survey has shown signs of a further slowdown in
house prices in London, while properties grew strongly in the North of
According to the UK's biggest mortgage lender
Halifax, Londoners saw the price of their properties increase by just
2.7% to £220,525, while in the South East they were up 3.3% to
But house prices in the North jumped more than 8%
during the first three months of the year, while they dropped 5.4% in
The North enjoyed the strongest growth of all regions
in the first quarter, with prices increasing to an average £83,833,
with houses in Northern Ireland falling to £77,250.
NEW YORK CHASES CONSULATE TAXES
The mayor of New York City, Michael Bloomberg, has
launched a $100m (£64m) lawsuit in a row over taxes on buildings used
by overseas governments.
The city is chasing Turkey, the Philippines, India
and Mongolia for what it says are unpaid property taxes stretching back
LIBERIA DENIES SWISS ASSET CLAIM
Liberia's government has denied claims that it has
salted away $3.8bn in Swiss Bank accounts.
President Charles Taylor called on opposition parties
and the international groups to investigate the claims and said he would
resign if they were proved to be true.
SARS HITS HONG KONG GROWTH
With shops closed, airlines slashing flights, hotels
and restaurants emptied, Hong Kong's targets for economic growth will
have to be scrapped.
The government's acknowledgement of just how bad the
SARS virus is for economic as well as physical health came as
legislators passed a budget packed with tax rises and cost cuts to trim
a HK$70bn (£5.7bn; $9bn) budget deficit.
MCDONALD'S GOES UPMARKET
Fast food giant McDonald's says it is changing
direction, after suffering the first loss in its 55-year history.
The firm's executives have conceded that its approach
is out of date and would now change to give more healthy food and higher
The world's largest restaurant chain is also planning
to open fewer restaurants — expanding by only 360 outlets this year,
compared to more than 1,000 in 2002.
TV PRICE WAR LOOMS IN CHINA
China's biggest maker of colour televisions is to
slash the price of its top-end products by at least 25%, to bolster
profits by stepping up sales at the luxury end of the market.
Sichuan Changhong sells roughly one fifth of all
televisions sets bought in China but must grapple with an increasingly
Prices on some products would be cut by as much as
40%, the firm said in a statement published in the official stock market
journal, Shanghai Securities News.
The price cuts will centre on upmarket
rear-projection TVs in the hope of boosting demand among middle income
households, most of whom already own a television.
UN PAYS OUT IRAQI COMPENSATION
The United Nations has said hundreds of millions of
dollars have been paid out to victims of the 1990 Iraqi invasion of
The UN said $863.7m (£556m) was paid to the victims,
with $738m going to Kuwait's wealthy elite, companies and the state.
The UK was the second largest payment of $23m
followed by Israel with $20m.
The UN Compensation Commission (UNCC), which is
dealing with almost $350bn in claims against Iraq, said a total sum of
$17.5bn has been paid out to date.
BROWN CONFIRMS KEY EURO DATE
A decision on the UK and the euro will be announced
in the first week of June, Chancellor Gordon Brown has confirmed in his
The chancellor said his assessment of the five tests
on joining the currency would be published at that time alongside 18
The government had vowed to rule on the euro within
two years of the last election — a deadline which runs out in June.
A positive verdict would spark a referendum on
whether the UK should join the euro.
AFRICA 'BEST FOR INVESTMENT'
People investing their money in Sub-Saharan Africa
last year have probably not regretted it.
According to a report by the World Bank, foreign direct investment (FDI)
in Sub-Saharan Africa yielded the highest returns in the world in 2002.