Growth in most Asian economies is expected to remain strong throughout 2004, but may moderate into 2005 (IMA Asia September forecasts). Key influences on growth in the region continue to include the bird flu outbreaks, strong consumer demand, a slowdown in exports and higher inflation due to increased food costs and higher oil prices.

Bird flu has been identified as a continued threat to some south-east Asian economies, with Malaysia, Vietnam, Thailand and southern China continuing to struggle with minor outbreaks. However, officials seem to be moving quickly to quarantine outbreaks, and this should assist in preventing a major outbreak that would damage economic growth in the region.

Growth in the second half of 2004 may be stronger than many analysts first expected, as recent data suggests only a slight slowdown in growth for Asia’s export manufacturing economy. With the exception of South Korea, consumer and investment demand continues to improve across the region and this may help to offset the slowdown in export growth.

Inflation in most countries has risen, driven by higher food and oil prices, while the recent typhoons in north Asian countries may also serve to push inflation higher than expected. Higher energy prices may have a more prolonged impact on inflation than first thought, forcing up producer prices in Asia.

Source: Meat & Livestock Australia