Asia's newly industrializing countries--such as Thailand, Singapore, South Korea and Taiwan--will suffer economic slowdown next year as they come under mounting U.S. pressure to cut their trade surpluses, according to Japan's Institute of Developing Economies, a semi-governmental research institute.
The institute said the countries would also be hurt by an expected economic slowdown in the United States, the main market for their exports, and increasing pressure for the appreciation of their currencies. The United States, saddled with a huge trade deficit, has accused the Asian nations of deliberately holding down the value of their currencies to increase the competitiveness of their products in the U.S. market.
The institute said Thailand's economic growth would slow to 5.5% in 1988 from 5.7% this year; Singapore's would fall to 6.3% from 8%; South Korea's would slip to 8.6% from 12.3%, and Taiwan's would decline to 7.3% from 10.1%.
The Philippines snapped out of a three-year economic stagnation in 1987 thanks to increased government spending, it said. The country is expected to register growth of 4.9% this year and 4.5% in 1988. The institute forecast that growth in both Indonesia and Malaysia would pick up to 3.4%, helped by stable prices for their commodity exports. Indonesia's economy is expected to expand by 3.2% this year and Malaysia's by 2.8%, it said.