So-called crisis countries, those that suffered the most amid the Asian economic crisis of 1997-1998, are most vulnerable to a slowdown, the bank said, although an ADB economist stressed that nations that engaged in corporate restructuring would have a better chance of resisting an economic downturn. "In October (when the ADB last published 2001 estimates) we were cautiously optimistic," said Yoshihiro Iwasaki, head of ADB's regional economic monitoring unit. "But since then, the situation had deteriorated somewhat. so we will likely soon lower our estimates." The ADB plans to release a report in coming days with updated views on the Asian economy.

Mr Iwasaki said South Korea's economic growth would likely slow to an annual rate of around 5% this year, compared with an estimated 8.3% growth percent in 2000. In October, the bank has projected 6% percent growth rate for South Korea this year. The Philippines could endure the sharpest slowdown, registering GSP growth of around 2.8% in 2001, down from an expected rate of 3.8% for 2000. The ADB had originally projected growth of 4.3% in the Philippines.

Mr Iwasaki said Thailand's growth forecast could be trimmed to 4% from the bank's original esitmate of 4.6%, while growth in Malaysia would likely come in at around 6% and Indonesia's growth rate at 4%, both down about one percentage point from the bank's earlier projections. The economist stressed that these estimates are preliminary and wouldn't be finalised until March.

Asia would have been well-placed to weather a US economic downturn if Japan's economic recovery had remained on track, said Mr Iwasaki. However, Japan's economy is showing signs of weakeness, given the country's declining industrial figures, he said. "If there is a major slowdown in the US, Japan won't be able to compensate for it," Mr Iwasaki said.

One concern is that a lack of corporate restructing in many Asian countries has left then more vulnerable to an economic downturn. Likewise, he said economic-stimulus measures taken by some Asian nations in the wake of the financial crisis had increased the size of their fiscal deficits. As such these governments, particularly in Thailand and Philippines, would have fewer fiscal options to deal with an economic slowdown.

(The Asian Wall Street Journal)