Tuesday, there were some gloomy forecasts for Asian economies. The Manila-based Asian Development Bank cut its economic growth forecast for developing Asia to the level last seen during the 1997/1998 Asian financial crisis. In Japan, the Prime Minister ordered his cabinet to draw up yet another economic package by mid-April, while the country's jobless rate hit a three-year high.

According to ADB's annual economic publication, the Asian Development Outlook 2009, economic growth in developing Asia is expected to ease to just 3.4% this year from 6.3% last year. The outlook for the region that excludes Japan, will improve to show 6% growth next year, provided the global economy experiences a mild recovery, the bank said.

Japanese Prime Minister Taro Aso instructed his cabinet to come up with a new economic package by mid-April aimed at drafting a supplementary budget for fiscal 2009 to combat the ongoing economic slump. The size of the planned new package is reported to be worth more than JPY 10 trillion.

This would be the third stimulus package for the world's second largest economy. Yet, speculation is rife that more measures would be needed to bring the economy out of recession.

On the data front, a report from the Ministry of Health, Labor and Welfare said Japan's seasonally adjusted unemployment rate came in at a three-year high of 4.4% for February. That was slightly higher that forecasts for a 4.3% increase after the 4.1% gain in January.

Household spending was down 3.5% on-year, declining for the 12th consecutive month, the data showed, versus expectations for a 4.7% annual fall after the 5.9% contraction in January.

Further, the ministry said that labor cash earnings were down 2.7% year-on-year in February, versus expectations for a 1.5% fall after the revised 2.7% contraction in January.

Elsewhere, Japan's Ministry of Land, Infrastructure and Transport reported that housing starts dropped 24.9% year-on-year in February, after declining 18.7% in January. Economists expected a drop of 17.6%. This was the third consecutive month of decline in housing starts. Construction orders received by the 50 big contractors slipped 24.9% in February, at a slower pace compared to a 38.3% drop in the previous month.

Japan's small business confidence showed an unexpected improvement in March and is expected to improve further in April. The Shoko Chukin Bank said its small business confidence indicator rose to 30.4 from February's 25, while the consensus forecast was a decline to 24.3.

Malaysia's current account surplus declined to MYR30.4 billion in the fourth quarter from MYR38.7 billion in the third quarter, the Department of Statistics said.

South Korea's National Statistical Office said in a report that the industrial production declined 10.3% year-over-year in February, compared with a revised 25.5% fall in the previous month. Economists were looking for a decline of 16.6%.

Macau's trade deficit stood at MOP2.02 billion in February, narrowing from a deficit of MOP2.08 billion in January, the Statistics and Census Service or the DSEC said. Exports plunged 31.9% year-on-year in February.

In other news, the Paris-based think tank the Organization for Economic Co-operation and Development released its latest global economic forecasts. The group expects global economy to shrink 2.7% this year. According to OECD, the Japanese economy is likely to contract 6.6% this year, while growth in China and India is set to ease to 6.3% and 4.3% respectively.

Meanwhile, the World Bank also released its latest economic forecasts that projected a 1.7% contraction for the global economy this year. World Bank sees China's growth slowing to 6.5% this year, while the South Asia is expected to expand at a weaker pace of 3.7%.

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