More bad news from Asian economic power houses

TOKYO: Asian economic giants Japan and India yesterday revealed fresh damage from the global financial crisis, which has battered international trade and consumer spending.

Japan slipped deeper into recession with factory output tumbling 3.1 per cent and consumer spending dropping 3.8 per cent in October, official data showed.

The figures were "stunningly bad," said Societe Generale's chief Asia economist, Glenn Maguire.

"Japan's industrial activity is set to worsen in the near-term, perhaps by an unprecedented degree, as exports to the US have plunged over the past year," he warned.

Rising economic powerhouse India, struggling with extremist attacks in the financial capital Mumbai, said its economic growth slowed to 7.6 per cent in the third quarter of 2008, from 7.9 per cent in the second.

While it was still a respectable performance at a time when many developed economies are in recession, the slowdown in India highlights the extent to which the US-born financial crisis has spread around the world.

There was also bad news from South Korea, where industrial production fell 2.3 per cent in October in a sign that the export-driven economy was slowing faster than expected.

In Thailand, exports grew 4.7 per cent on an annual basis in October, way below the 5.5 per cent forecast in a Reuters poll.

Thailand's current account deficit widened to US$1.13 billion (US$1 = RM3.26), and the October trade deficit surged to US$964 million versus a US$142 million surplus in September as imports rose 23.5 per cent from a year ago, more than expected.

Thailand had been the only Asian nation predicting growth would actually pick up this year after a lacklustre performance in 2007. But data this week showed that economic growth was at a 31/2-year low in the third quarter and the government slashed its growth forecasts. - Agencies