HONG KONG — A slew of gloomy economic reports from Asian nations show that Europe's debt crisis and the broader global downturn are taking a growing toll on the region even as governments respond with extra spending and lower lending rates.
Hong Kong and Singapore, both Asian financial centers that are highly exposed to global trade, reported weak second quarter GDP Friday, the same day that figures from China showed its trade slowing more sharply than forecast in July.
China, the world's second-biggest economy, said its export growth slumped to 1 percent in July from the previous month's 11.3 percent in a sign of global economic weakness. Growth in imports sank to 4.7 percent from 6.3 percent in June, indicating that domestic demand also remains weak.
Other reports this month from economies including India, South Korea and Taiwan underlined the challenges that the export-reliant region is facing.
"Given this backdrop, the 1 percent from China merely reconfirmed that the severe headwind from the euro zone crisis and the U.S. slowdown is blowing harder," Societe Generale economist Yao Wei said in a report.
Analysts expect China and other countries to step up efforts to fend off the downturn. China has cut interest rates twice since June and boosted infrastructure spending. Barclay's Capital said another rate cut is imminent after Friday's gloomy trade figures.
South Korea held interest rates steady this week after a surprise cut last month. But it warned that Europe's debt crisis will result in the South Korean economy, which is one of Asia's wealthiest, underperforming for a sustained period. That led central bank watchers to predict another rate cut soon.