World Bank President Predicts Asia in for Tough Year

World Bank President James Wolfensohn said next year will be tough for Asian economies and policymakers grappling with weak consumer spending and fewer exports as the U.S. economy slows. Most Asian countries were able to export their way out of trouble after their economies contracted in 1998 as customers in the U.S., enjoying a record expansion, snapped up the electronics products produced in the region. With demand in the U.S. waning, Asia now looks vulnerable, he said in an interview in Tokyo. “There are a number of factors that are causing orange lights to go off, but at the moment, I think it’s not yet clear what the outlook is going to be,” Wolfensohn said. He stopped short of predicting recession in Asia or a surge in World Bank lending next year, though he acknowledged the concerns of investors that have marked down stocks and currencies in the region. Stock markets in Korea, Taiwan, the Philippines, Thailand and Indonesia are among the 10 worst performing bourses in U.S. dollar terms this year. The World Bank shelled out a record $28.6 billion in loans in 1998, a 50% increase from the year earlier, to combat recessions in a number of East Asian nations.