New GDP growth forecasts, further rate cuts likely

There is clearly a great deal of uncertainty over how long the crisis will last, but we think growth in Emerging Asia (excluding China and India) will slow by around 2.5%-points in the first quarter of this year. This would mean an even bigger hit to economic activity than during the 2003 SARS outbreak. With economic growth being hit hard, central banks have sprung into action. In the past couple of weeks, policymakers in China, Sri Lanka, Malaysia, Thailand and the Philippines have lowered interest rates. We also now think the central banks of Korea and Taiwan will cut interest rates over the coming weeks.