Container ships are loaded with export goods at Klong Thoei port in Bangkok, Thailand

India’s overseas sales plunged the most in a decade in January and Indonesia’s shipments suffered their biggest decline since 1986 as the global recession pummeled Asian exports.

India’s rupee slid to a record low and South Korea’s won weakened to the lowest since 1998, on concern sliding exports and shrinking economies will deter foreign investment. The slide in overseas sales may put pressure on governments in Asia, which is twice as reliant on exports as the rest of the world, to add to interest-rate and tax cuts to revive growth.

“With current economic conditions even tougher than last year, and a further deterioration in coming months likely, most Asian economies are on track to record an annual contraction in 2009,” said Sherman Chan, an economist at Moody’s Economy.com in Sydney. “For some, this year will be the most difficult since the Asian financial crisis; for others, the economic situation will be the worst in a few decades.”

The rupee was at 51.69 per dollar at 1:31 p.m. in Mumbai, compared with 51.15 on February 27. It fell to an all-time low of 51.815 earlier. The won dropped 2.3 percent to 1,574 per dollar as of the 3 p.m. close in Seoul. Indonesia’s rupiah declined 1.9 percent to 12,210 a dollar as of 10:32 a.m. in Jakarta. It earlier reached 12,300, the weakest since February 18.

Japan, China

Recessions in the US and Europe, the region’s biggest market, are crimping demand for made-in-Asia products. Last week, Japan reported exports plunged a record 45.7 percent in January and earlier China said its shipments tumbled 17.5 percent in the same month, the biggest decline in almost 13 years.

International trade would shrink in 2009 for the first time in more than 25 years as economic expansion slows and commodity prices slide, the World Bank said in December. World trade volumes will probably contract this year by 2.1 percent, hampered by exchange rate volatility and flagging import demand.

Asian governments have responded to the global slowdown by unveiling fiscal stimulus packages worth almost US$700 billion to kick-start local consumer and business spending.

Indian Prime Minister Manmohan Singh’s government has announced cheaper credit, tax refunds and eased trade rules ahead of elections to be held before May, to help exporters maintain profits and minimize job losses.

Firing workers

Companies such as Honda Motor Co. and Hyundai Motor Co. are scaling back production in India and firing workers amid the world economy’s worst crisis since the Great Depression.

The contraction in India’s export growth reported Monday was the biggest decline since May 1998, when overseas sales fell 17.22 percent, according to Bloomberg data.

To help protect India from the impact of the global slump, Prime

Minister Singh’s government has announced three stimulus packages since December. Initiatives have included tax cuts on consumer products and services and higher spending on roads, ports and utilities.

The central bank, for its part, has slashed its repurchase rate four times since October, to a record low of 5.5 percent. Industrial output shrank 2 percent in December from a year earlier, the most in almost 16 years.

Fiscal stimulus

South Korea’s government has allocated about 51 trillion won ($33.6 billion) in tax cuts and spending and Finance Minister Yoon Jeung Hyun said he is planning an extra budget package that may be unveiled this month. The central bank reduced the benchmark interest rate to a record low of 2 percent on February 12, the sixth cut since October.

India is unlikely to meet its target of $200 billion of exports in the fiscal year to March 2009, Trade Minister Kamal Nath said last week.

Declining overseas orders and shrinking local demand caused Indian growth to slow for the third straight quarter, the government said last week. The $1.2 trillion economy grew 5.3 percent in the three months to December 31 from a year earlier, the weakest pace since the last quarter of 2003, after 7.6 percent growth in the previous quarter and 7.9 percent in the three months before that.

Economic growth may slow to 6.7 percent in the year to March 2009, less than the government’s estimate of 7.1 percent, said Tushar Poddar, a Mumbai-based economist at Goldman Sachs Group Inc.

Source: Bloomberg