Predicting the economic future
By Peter Switzer

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China’s growth
Morgan Stanley Asia forecasts China's growth to be around 7.5% for 2009. This compares to the optimists who think 9% and the bears who say 5%.

Recently, the World Bank cut its growth forecast for China from 9.2% to 7.5%.

Morgan Stanley thinks the interest rate cuts and fiscal stimulus packages in the USA, Japan and the Eurozone will sow the seeds of a global recovery around mid year, which will bolster China’s growth. Interest rate cuts are expected over the year, which will help the economy.

Singapore and Hong Kong
Singapore and Hong Kong have joined Japan in recession, with Singapore contracting by 0.6% in the third quarter of 2008. This was the second quarter in a row Singapore had contracted. Economic experts say small trade-dependent city/states, such as Singapore and Hong Kong, are very sensitive to global trading trends. Given the feeling that a US recovery might come in the second half of 2009, at best, these economies will find conditions challenging for the first six months of next year.

Strive for the best
Given the virtual consensus that a tough six months lies ahead in 2009, Asian businesses should strive for best practice within their operations while keeping their fingers crossed that the USA and China can arrest their respective slowdowns, as soon as possible.

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