The strong global recovery that was widely expected to take place in the latter half of 2002 has not materialized. On the contrary, increasing uncertainties are undermining the confidence of consumers and investors worldwide, and the speed of economic recovery in the industrialized world is likely to be slower than anticipated several months ago.
Developing countries in the Asia-Pacific region, however, have shown their resilience and are projected to register higher GDP growth rates in 2002 and 2003. According to a recent forecast made by the Asian Development Bank, the average growth rate of developing Asia is expected to accelerate from 3.7 percent in 2001 to 5 percent in 2002, and 5.7 percent in 2003.
Many countries are projected to have a GDP growth rate of over 5 percent this year, including China, South Korea, Laos, Vietnam, Bhutan, Azerbaijan, Kazakstan, Tajikistan and Turkmenistan. In most of these countries, both domestic and external demand have contributed to the high GDP growth. Many adopted an expansionary fiscal policy and accommodative monetary policy to boost domestic demand. At the same time, they have been able to increase their exports, taking advantage of the global economic recovery, however weak it might have been. Furthermore, some of these countries are increasingly engaging in trade with other Asian countries, raising the share of intraregional trade in their total trade.