The economies of East Asia, including Japan, ended last year strongly, despite the noticeable slowdown in the US and in Europe. Buoyed by a fiscal stimulus package, private consumption in Hong Kong is booming; domestic demand expanded at double digit rates on an annual basis in the final quarter of last year and the preliminary data for the first several months of this year show no abatement. Elsewhere, strong credit growth and healthy labour markets underpin investment and private consumption growth in South Korea and across the region in general. We expect output growth to moderate somewhat but to remain healthy this year in much of East Asia and Australia. GDP is forecast to expand by nearly 3 per cent per annum in Australia, down from a 3.9 per cent pace recorded last year. China is forecast to grow by over 10 per cent this year, down from an 11.3 per cent pace in 2007. Output growth in Taiwan is likewise expected to moderate to about 5¼ per cent on an annual basis.