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Good morning, ladies and gentlemen. For this lecture, I am going to touch the. issue of slowdown of the world economy.
      The data has shown that in the past three months many economies in Asia enjoyed a stronger- than-expected second quarter. But slowdowns in the rest of the world mean the region wig see weaker growth in the second half.
      In the past few weeks, data on second-quarter real gross domestic product have been released. Only South-Korea and Malaysia posted growth weaker than analysts had projected.
      In general, these Asian economies were powered by rising electronics exports and highly accommodative fiscal and monetary policies. Capital-spending trends were mixed, but other factors helped individual countries. Thailand, for example’, benefited from a surge in tourism from China; Indonesia experienced less of a drag from a drawdown in inventories, and Singapore saw a gain in exports from its biomedical industry.
      The region, however, faces a more difficult second half, especially if a domestic demand from business doesn’t kick in. Slowdowns in the U.S. and Europe, coupled with the continued problem in Japan, mean that demand for computers, consumer electronics, and semi-conductors will not continue to grow at double-digit rates. Already, July factory output in Malaysia fell more than 1%, as the output of information-processing gear and electronics plunged.
      In addition, some countries will face fiscal difficulties. One reason Korea’s GDP data fell short of expectations is that the government suddenly stopped funding building projects.  Foreign investors are growing worried about the deficit in the Philippines, where the red ink in just the first seven months of the year has exceeded the government’s estimate for all of 2002.
      Another concern is social unrest and corruption, which could destabilize governments. With the world approaching the first anniversary of the September 11 attacks in the U.S. , clashes between religious groups may pick up in the region. Such unrest could make investors nervous and more likely to pull money out of Asia just as capital spending will be needed to offset slower export growth.
      In Europe, things didn’t seem any better. Germany’s manufacturing sector is getting hit by softer domestic demand and exports. European Commission’s indexes of industrial confidence show German businesses are the most downbeats of all in the euro zone. Since Germany is a major market for other euro zone products and attracts foreign capital, its slowdown will curtail trade and investment flows for the entire region well into next year.
      Meanwhile, another country of Europe, Italy, also seems unlikely to hit its government’s growth target for this year. And the shortfall could cause a big fiscal problem later on. In the past year, consumer spending slowed, and business investment fell. Industrial orders are dropping, consumer confidence is close to a five-year low, and business sentiment in the last month held at six-month low. Companies are cautious about future orders and production plans. On the whole, we can see that economy of the earth is facing a slump. Next week, we’ll discuss some possible solutions to these problems.