Japan fears U.S. economic slowdown

Ulhas Joglekar ulhasj at bom4.vsnl.net.in
Sun Nov 28 16:18:21 PST 1999

27 November 1999 Japan fears U.S. economic slowdown Tokyo: Asia's recent economic upswing has been largely fueled by exports to America, and a U.S. economic downturn could send the region plummeting back into recession, the Japanese government said today. Asia must wean itself off exports to the United States to ensure a stable recovery, the government's Economic Planning Agency said in its annual report on the world economy. Many Asian economies, including Japan, have slowly been emerging from their worst recession in decades. Robust U.S. demand for their goods deserves much of the credit, the report said. But America won't be able to continue its level of imports of Asian products forever, it warned. The EPA said that U.S. stocks have recently been overvalued by as much as 55 percent. Many of the factors behind U.S. economic growth, such as low inflation and rising labor productivity, have started to fade, it said. There is ``more than a slim chance of (U.S.) stock prices declining sharply,'' the EPA said in its report. ``If stock prices were to fall sharply, the effect ... on overseas markets would be serious.'' The report said rising oil prices have raised fears of inflation in the United States, a threat the Federal Reserve has sought to counter by raising interest rates. Despite the EPA's cautionary tone, it remained generally optimistic about Asia's short-term prospects. It cited International Monetary Fund predictions that Japan's economy would grow 1 percent in the fiscal year through March 31, and that the economies of the Association of Southeast Asian Nations - among the worst hit by the regional financial crisis - would expand 1.4 percent. (AP)

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