Southeast Asia Bearish as U.S. Demand Slows

Stung by sagging U.S. demand for their exports and worried by a falling yen, Southeast Asian countries said on Sunday that they expect the region’s growth to slow to 3% to 5% this year from 5.3% in 2000.

The 10 members of the Assn. of Southeast Asian Nations made the bearish forecast in a communique issued at the end of their finance ministers’ two-day meeting in Kuala Lumpur.

“In view of the expected slowdown in the global economy, the outlook for the ASEAN countries will be less favorable,” the communique said.

“Export growth in the ASEAN economies has moderated since late last year and foreign direct investment are expected to remain subdued in the near term.”

Fast-dropping U.S. demand for goods such as computer and electronic equipment have hit the region’s export-oriented economies hard. The benefits of making their products cheaper by weakening their currencies will be offset if the overall market for their goods is shrinking, and Southeast Asia will be hoping the American consumer will come to its rescue by year-end.

Meantime, the yen’s recent weakness, which has dragged down their currencies in its wake and dulled Japanese demand for their goods, has added to worries.