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Economy in Brief

Strong Growth in Asia excl China Beginning to Lessen Deflationary Tendencies
by Louise Curley May 18, 2004

Japan, Singapore and Taiwan have recently released data on their first quarter Gross Domestic Products. On a seasonally unadjusted basis, year-over-year growth in Japan was 5.36%, Singapore, 7.48% and Taiwan, 6.28%.

The increases in the rates of growth in each country over the past year are beginning to bring about a lessening of the deflationary climate that has characterized the area for the past several years. Japan has experienced the longest and most severe deflation; and although there was a slight decline in deflation in the first quarter, it is still too early to say that the trend has been reversed. In Taiwan and Singapore, however, the data are more encouraging. The rate of decline in Taiwan's deflator has moderated over the past year and in Singapore there was a 3% increase in the deflator in the first quarter of this year.

While these countries have been experiencing deflationary trends, China is contending with rapidly rising prices as its economic growth accelerates.

Year over Year Growth  Not seasonally adjusted Q1 04 Q4 03 Q3  03 Q2 03 Q1 03 
2003 2002 2001 2000
Singapore                
  GDP 7.48 4.90 1.70 -3.87 1.65 1.09 3.29 -2.37 9.41
  Deflator 3.02 -1.08 1.76 -1.82 0.43 -0.41 0.40 -1.14 4.48
Taiwan                  
  GDP 6.28 5.17 4.18 -0.08 3.52 3.24  3.59 -2.18 5.86
  Deflator -1.72 -2.52 -1.72 -1.89 -2.52 -2.17 -0.97 0.55 -1.79
Japan                  
  GDP 5.36 3.17 1.99 2.19 2.73 2.53 -0.21 0.63 2.13
  Deflator -2.51 -2.66 -2.08 -2.54 -3.21 -2.79 -1.16 -1.54 -1.94
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