Fiscal easing too late to prevent deep downturn in 2009 (Feb 09)

As interest rates have fallen rapidly across much of the region, policy focus has turned towards fiscal measures to support Asia’s crumbling economies. But with most stimulus packages geared towards infrastructure spending with long implementation lags, the benefits are only likely to be felt late in the year. With global demand for Asian goods set to weaken further in the months ahead, we expect GDP growth in Asia ex-Japan to slow to roughly 2.8% this year, from around 7% last year and nearly at par with the trough in growth of 2.4% during the Asian financial crisis in 1998.