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To: Lee who wrote (119867)	4/25/1999 2:48:00 PM
From: Mohan Marette	Respond to of 176387

<S.E.Asia-Economy> On the Rebound???? Hi Lee: Here is further confirmation about the SEA economic recovery??? Has it Hit Bottom? The Asian economic crisis may be bottoming out, with the Asian economies set for much stronger growth in 1999, according to the official forecasts of the Asian Development Bank (ADB). But any recovery depends on a revival of private sector demand, and stability in financial markets. The prediction comes as the world's bankers and finance ministers gather for the spring meeting of the International Monetary Fund (IMF) and World Bank in Washington. The IMF will announce its world economic forecast on Tuesday. "Although the financial crisis still reverberates throughout the region, we are seeing distinct signs that this sharp contraction may be bottoming out," ADB Vice President Peter Sullivan said, presenting the bank's annual forecast. The bank says that average growth in developing Asia will increase from 2.6% in 1998 to 4.4% this year and 5.1% in 2000. Korea turnaround But the averages conceal some very big regional variations, with the 10 countries in Southeast Asia, growing at only 0.8% in 1999 after the region's gross domestic product (GDP) contracted 6.9% last year, "underperforming even the most pessimistic expectations," the bank noted. China, on the other hand, is expected to grow by 7%, not far off its 7.8% official growth rate in 1998. "A combination of large reserves and stringent restrictions on foreign-capital movements means that (China) is unlikely to face a financial panic of the kind that struck so many of its neighbors," the report said. And Korea is expected to have the biggest turnaround, with growth of 2% this year after a decline of 5.5% in 1998. Problems remain But problems remain, particularly with the fragile Asian banking system, which is undercapitalized and threatened by bad loans. And private capital is still flowing out of Asia. After investing $105bn in 1996, international investors withdrew $55bn in 1998. Japan's banking system is the key to the problems in Asia. "Given the large volume of Japanese lending to the region before the crisis, substantial progress in resolving Japan's banking difficulties would increase the flow of capital to Asian banks and firms," the ADB said. Public boost, private despair Japan's weak economy also demonstrates one of the central problems in the region. Governments have poured billions into stimulating economic revival, but private consumption and investment remains weak, while firms are still deeply in debt. Korea's two biggest conglomerates, or chaebols, each have 5 times as much debt as they have capital. "For this year, things have improved but all of the economies are still very vulnerable to both external and internal shocks," said Hung Tran of Rabobank International. Many economists believe that although there may well be a technical recovery, it is premature to assume the Asian crisis is over. (source: BBC World News) ============================= (Courtesy:Probity Research,Mumbai,India) Silver lining in Asia too Business confidence in Asian countries is reviving and there is hope that some of the Asian countries might post a positive economic growth in the current year. The IMF has revised its economic growth forecast for several South East Asian countries favorably eg South Korea from -1% to +2% and for Malaysia from -2% to +0.9%. Also Philippines, despite a bad agricultural year is showing promising signs of a positive GDP growth. The only laggard will be Indonesia suffering from political and social problems. Still Indonesia's economic performance is expected to be better than the same in previous year GDP growth from -13.7% to -4%. A fallout of revival in business confidence has been on commodity prices.In the last 2 years of gloomy outlook for commodities, pipeline stock went down to the lowest level. Imagine if manufacturers, distributors, wholesalers, retailers together stock up even one month's inventory, demand will go up by 8.3% without any growth in consumption at all. Therefore in the first phase of revival, psychology works more than the actual consumption growth................>

To: Lee who wrote (119867)	4/25/1999 2:59:00 PM
From: Mohan Marette	Read Replies (1) \| Respond to of 176387

<China> Monetary Policy--->Steady as she goes. Lee: Stable Yuan it is. =========================== 4/20/99 China Central Bank and Monetary Policy BEIJING - China's central bank, the People's Bank of China, plans to maintain its current monetary policy through the second quarter, including keeping the yuan stable and increasing money supply, Xinhua News Agency said Monday. Fast money supply growth during the first quarter this year reflects the effectiveness of central bank policy in helping to spur economic growth, said top PBOC officials during a recent policy meeting, according to Xinhua. As reported, China's broad measure of money supply, M2, rose 17.8% by the end of March from the year-earlier period to CNY10.844 trillion. The growth in M2 was 2.5 percentage points faster than the growth recorded at the end of 1998. The central bank plans to increase M2 by 15% in 1999 from 1998. Meanwhile in the first quarter, bank loans and deposits continued to grow at a fast rate, China's yuan exchange rate remained stable and foreign reserves continued to increase, Xinhua said. China's outstanding loans totaled CNY8.783 trillion at the end of March, an increase of 15.7% from the year-earlier period, while total deposits rose 18% on year to CNY9.944 trillion. Foreign reserves reached $146.6 billion at the end of March, from $145 billion at the end of 1998. For the second quarter, the PBOC plans to continue with first quarter's policy, while increasing efforts to guard against financial risks and halting deflation, the report said. The central bank also called on financial institutions to boost lending to agriculture, infrastructure, technical upgrade and development projects, as well as extend consumer loans and loans to exporters. (Courtesy: Xinhua)