Beijing: Asia’s major economies reported a slew of gloomy news on Thursday showing the global crisis was hitting harder, as export-dependent nations felt the pinch from the worldwide slowdown.
China’s economy slowed sharply in the final quarter of 2008 to just 6.8% as thousands of factories that sold to overseas markets shut, pulling the full-year growth figure down to 9%, official data showed.
Japan warned it was facing a two-year recession and announced new measures to repair battered credit markets, after announcing a 35% plunge in exports in December as consumers worldwide tightened their belts even more.
South Korea, meanwhile, said its economy was in the worst shape since the East Asian financial crisis a decade ago, following a 5.6% contraction quarter-on-quarter in the final three months of 2008.
The data for three of Asia’s four biggest economies reflected similar woes across the rest of the region.
National Australia Bank group chief economist Alan Oster described Asia’s economic health as “in a word, poor -- and deaccelerating quickly.
“One of the big problems is when we look at industrial production and GDP across the region, we see quite rapid declines,” Oster said.
Many of the region’s national economies were “trade-exposed” and faced growing problems as global fortunes declined, he said.
“We broadly see the global economy as going into a period where 2009 looks like it’s going to be the worst year since World War II.”
Singapore reported on Wednesday it was facing its worst-ever recession after the economy contracted by 16.9% in the final quarter, its biggest fall on record.
The city-state, a financial hub for Southeast Asia, announced on Thursday a $13 billion stumulus package in an effort to turn things around.
In China, as many as six million people from the countryside have lost their jobs in the cities because of the economic crisis, the National Bureau of Statistics said as it released key data for 2008.
Many of these rural migrants worked in factories that sold products overseas, and the bureau’s announcement confirmed the growing problem facing China as export markets evaporate.
Economists said the latest data showed it would be extremely difficult for China’s economy to grow this year by 8%, a rate considered by many to be a minimum to maintain employment at a level that ensures social stability.
In South Korea, the government could not hide its shock at how quickly its economy was falling apart.
Year-on-year, the economy shrank 3.4% in the fourth quarter compared with 3.8% growth in the third. The annualised figure showed the biggest fall since the fourth quarter of 1998 when it contracted 6%.
For the whole of 2008, South Korea’s economy grew 2.5%, sharply down from a 5% expansion in 2007, the central bank said.
The trade data out of Japan led analysts to predict that the economy there would suffer its worst performance since 1974 in the fourth quarter of 2008, with a contraction of 10% or more.
Downgrading its earlier outlook, the Bank of Japan (BoJ) said the world’s second biggest economy was expected to contract by 1.8% in the current financial year to March and by 2% the following year.
The BoJ said it would spend up to ¥3 trillion ($33.7 billion) to buy commercial paper, a type of short-term corporate debt, to make it easier for companies to secure vital credit during the recession.