SINGAPORE - Macquarie Research slashed its forecasts for economic growth in Asia, joining other analysts who are downgrading their views for the region on inflation concerns and slower growth elsewhere in the world.
In a note, Macquarie Research hacked its 2008 growth forecasts for the Philippines, Thailand and India by at least 1 percentage point each from their previous forecasts in March.
It sliced its India growth forecast for the fiscal year ending in March 2009 to 7 percent, compared to previous expectations of 8 percent. That compares with growth of 9 percent in the year that ended in March 2008.
"Inflation rates continue to surge beyond the target ranges of Asia's central banks and we think the global slowdown will only intensify from here," analyst Bill Belchere said in the note.
"We expect rising inflation will force policy to tighten across Asia, even if many don't see the need yet."
For China, it sees 2008 growth of 10.5 percent versus a previous call of 11 percent. China's economy expanded 11.9 percent in 2007.
The economies of the Philippines and Thailand were expected to grow by 4.5 percent and 4.3 percent respectively this year, as opposed to previous calls of 6 percent and 5.5 percent.
Additionally, it trimmed its 2009 forecasts by 1 percentage point each for all Southeast Asian countries, except Singapore.
Rising food and fuel prices have driven inflation in many part of Asia to their highest in a decade, and analysts worry this will lead to smaller real incomes and depress consumption simultaneously as the effects of the credit crisis dampen global growth. However, the outlook for Taiwan appeared brighter and the forecast for Hong Kong remained largely unchanged, Macquarie Research said.
The group now forecasts Taiwan will see 4.2 percent GDP growth for 2008, rather than 3.5 percent previously, based on a "surprisingly strong" first-quarter outcome. Taiwan's economy expanded by an annual 6.06 percent in the first quarter.