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Economy in Brief

The Economic Slowdown in Asia
by Louise Curley December 2, 2008

GDP Growth in Asia is clearly decelerating. South Korea, one of the last Asian countries to release their third quarter GDP report, did so today. GDP in Korea increased 0.51% in the third quarter, down from 0.83% in the second quarter and 0.82% in the first.Although there is a clear deceleration in growth over the past year and a half, South Korea has managed to keep increasing output. For the year so far, growth in GDP has averaged an increase of 4.6%, not far from the 5.0% increase in 2007. However, also released today were data on exports and imports for November. Both exports and imports dropped sharply in November, with exports down almost 19% and imports down 17% from October. The November decline in exports should affect fourth quarter GDP adversely.

While the South Korean economy has managed to grow in each of the first three quarters of this year, those of Hong Kong, Singapore and Taiwan, the other three nations along with South Korea formerly known as the Asian Tigers, have begun to decline. In the third quarter real GDP in Hong Kong was 1.56% below the second quarter, in Singapore, 1.74% below and in Taiwan, 1.14% below, as shown in the first chart.

Change in GDP (%) Q3 08 Q2 08  Q1 08  2007 2006 2005 2004
South Korea (Q/Q) 0.51 0.83 0.82 4.97 5.13 4.20 4.73
Hong Kong (Q/Q) -1.56 1.67 2.12 6.37 9.91 6.77 8.15
Singapore (Q/Q)  -1.74 -1.37 3.72 7.74 8.22 7.26 9.00
Taiwan (Q/Q) -1.14 -0.56 0.63 5.61 4.94 4.16 6.15
China (Y/Y) 9.0 10.0 10.6 11.1 10.7 8.9 9.5
India (Y/Y) 8.76 7.92 7.60 9.25 9.76 9.07 7.20
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