Budget Paper No5 Northern Territory Economy 1998/99
Tabled Paper 382
Tabled papers for 8th Assembly 1997 - 2001; Tabled papers; ParliamentNT
Tabled by Michael Reed
Made available by the Legislative Assembly of the Northern Territory under Standing Order 240. Where copyright subsists with a third party it remains with the original owner and permission may be required to reuse the material.
growth in the more modest 4-5% range. Consequently the over investment in unproductive assets which plagued its neighbours had not occurred to the same extent. Growth of 5.1% was experienced in 1997. Growth of 2.3% in 1998 and 3.9% in 1999 is expected over the next two years as the recession in the Philippines neighbours rubs off. El Nio drought conditions have also caused substantial food shortages in the Philippines. Singapore has also been relatively lightly affected by the Asian currency crisis, a consequence of the more mature development of the Singapore economy and the more rigid control of Singapores important financial markets by the Monetary Authority of Singapore. In 1997, Singapore experienced growth of 7.8%, following growth in the range of 7-10% in earlier years. Growth is forecast to slide to only 3.0% in 1998, in line with the poor performance by its larger neighbours, before recovering somewhat to 4.7% in 1999. In addition favourable trade and current account surpluses are expected in Singapore over the next two years. While less important in a strategic sense, the economies of North East Asia are extremely important to the Territory as a destination for Territory exports, particularly mineral and energy exports. Within North East Asia, South Korea has been the most notably affected economy. In 1997 South Korea experienced a slowing in growth to 5.8%, down from rates of 7-8% in earlier years. Investment fell by 1.4% in 1997 with a further slip of 16.6% expected in 1998, before stabilising in 1999. The result of this fall in investment is expected to be a decline of 1.3% in output in 1998 followed by a mild recovery to 1.9% in 1999. While an important export destination for Australia, South Korea is of relatively minor importance to the Territory. Japan is somewhat different to all other Asian economies. It is among the worlds largest and wealthiest economies. Unlike its neighbours it has been in a low growth phase for a number of years, with average growth of only 2% in the 1990s. Poor financial management has also been a feature of the Japanese economy over the past year with some notable failures of financial institutions resulting from ill-considered loans. Japan is expected to record growth of only 0.1% in 1998 with a slight improvement to 1.0% in 1999. In many ways China is the sleeping giant of East Asia, experiencing a slowing in growth to 8.8% in 1997, down from 12.6% in 1994. A further slowing to 7.9% in 1998 is expected before a slight improvement to 8.3% in 1999. After a substantial devaluation in 1994, the Renminbi has not suffered a devaluation over the past year. Chinas greatest risk in the immediate future is the renewed competitive position of its East Asian neighbours which is likely to weaken Chinas strengthening current account and mechanise trade surpluses over the next two years. Like China, Hong Kong has so far been largely unaffected by the crisis with growth of 5.2% in 1997 actually a little higher than the average experienced over the previous three years. A slowing in 1998 to 2.7% with a small recover in 1999 to 3.5% is expected. Taiwan has been one of East Asias best-performed economies in 1997. Unlike South Korea, Taiwan has not been burdened by the overly ambitious and ill-considered development. Its growth in 1997 was 6.8%, Taiwans highest since 1992. Forecasts indicate growth of 5.8% and 6.0% in 1998 and 1999. 22 Northern Territory Economy
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