By ELAINE KURTENBACH
SHANGHAI, China (AP) - The debate is over. Slumping exports and surging unemployment, even in powerhouse China, have ended any question over whether Asia could shrug off the pain inflicted by the global financial crisis.
But while the outlook for the first half of the year is gloomy, economists say the latter half of the year promises at least some recovery.
China's 2008 is ending with a whimper, with fourth quarter growth forecast to drop to as low as 2 percent from nearly 12 percent in 2007 as exports stall.
India, Asia's other emerging market powerhouse, likewise is losing momentum, with exports contracting in October for the first time in seven years.
The deep slump in global demand for autos and other bread-and-butter exports has once again ensnared Japan, the world's second largest economy, in recession, crippling another key market for exports from the rest of Asia.
Singapore, Taiwan and Hong Kong have likewise succumbed.
Despite the gloom, Asia's banks and other financial institutions have had less exposure to the risky subprime mortgages causing havoc in the United States and Europe.
They also are better prepared to weather the storm thanks to the shake-up they got during the regional economic crisis a decade ago.
Closer trade ties in the region will also help, Subir Gokarn, Asia-Pacific chief economist for Standard & Poors, said in a recent conference call.
"This is not to say that interregional trade will offset the export slowdown, but it does provide a bit of a counteraction,'' he said.
The World Bank's latest forecast puts growth for East Asia, excluding Japan, at 5.3 percent in 2009, down from about 7 percent this year.
As Chinese leaders channel billions of dollars into potentially job-creating public works programs, the crisis could bottom out in early 2009, said Frank Gong, an economist with investment bank J.P. Morgan.
The recession comes at a time when China and many Asian countries are struggling over how to bridge the divide between those who prospered during the boom years and those still struggling to escape poverty.
But the region, including even politically volatile Thailand, can expect slower growth, not a contraction, economists say. "2009 will not be an outstanding year by any means, but it will reflect the region's resilience,'' Gokarn said.
LATIN AMERICA
Global downturn slows half-decade growth spurt in Latin America
By MAYRA PERTOSSI
BUENOS AIRES, Argentina (AP) - Global financial turmoil is ending a half-decade of more than 5 percent growth in Latin America, as prices for its commodity exports sink and foreign investors sell off assets to cover losses at home.
The global downturn has slashed demand for oil, copper, iron ore, grains and other regional exports, narrowing trade surpluses, while credit for farmers and small businessmen has tightened amid the global crunch, boosting unemployment and poverty.
Economic growth could slow to 2 percent across the region in 2009, its lowest level in years, said Claudio Loser, a former director at the International Monetary Fund.
Latin America's two largest economies, Brazil and Mexico, have seen growth forecasts more than halved, while analysts worry that Argentina, one of the world's top-five exporters of wheat, corn, soy and beef won't be able to service payments on $20 billion in debt next year as income from export taxes stalls.
Venezuela and Ecuador are especially vulnerable.
Their reliance on oil exports to finance as much as half of public spending has left them particularly exposed to volatile oil prices - now down some 70 percent from their July high, said Paulo Vieira da Cunha, economic analyst with Tandem Global Partners in New York.
Remittances - money sent home by immigrants, many of whom work in the United States - will also tank as the U.S. sheds jobs, slowing growth in Mexico, Colombia, Peru, Ecuador, the Dominican Republic, Haiti, El Salvador, Guatemala and Honduras.
Still, years of gains have armed Latin America to weather the global downturn better than other regions, as governments have paid down debts and amassed foreign currency reserves and rainy day funds they can now tap to boost their slowing economies.
Chile, for example, has saved more than $21 billion in copper revenue, allowing President Michelle Bachelet to pump at least $2 billion into the economy in stimulus spending this year. Copper makes up 40 percent of Chilean exports.
Those policies have helped the region defend itself from the downturn and ensure that it "will probably avoid the recession'' now plaguing the U.S., Moody's Economy.com wrote in a note to investors.
EURO-ZONE--AFRICA
EU cushions slowdown with economy stimulus plan
BRUSSELS, Belgium (AP) - EU leaders have approved an economic stimulus package of around 200 billion euros ($270 billion) to ward off recession in the European Union.
The euro-area economy entered into a recession when growth in both the second and third quarters shrank as investments plunged and spending froze.
Banks have cut their forecast for euro zone's economy in 2009 to between no growth and minus 1 percent, even with the assumption that the year's second half will see a very gradual recovery as global demand for euro goods picks up, led by emerging countries and oil exporters.
The euro economy is home to 320 million people and accounts for more than 15 percent of the world's gross domestic product.
The European Central Bank, which has been urged to loosen lending and stoke growth, cut interest rates to 2.5 percent from 3.25 percent early this month, the biggest cut in its 10-year history.
Economists say the cautious ECB should go further and cut below 2 percent in 2009.
In Sub-Saharan Africa, growth expanded to 5.4 percent in 2008, and is expected to still be 4.6 percent in 2009.
But the contribution of net exports to African GDP growth may fall.
Higher food and fuel prices also have led to growing poverty, raising the risk of social unrest, economists said.
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