ASIA'S economic crisis will deepen next year, as exports to recession-hit Western nations slump, but the region should still outperform the United States and Europe, analysts say.

Hopes that Asia would be relatively immune to the US-born credit crunch were dashed this year, as worsening demand in the US and Europe was felt in factories across the continent.

Even China, which until recently was enjoying double-digit growth, has been hit hard - exports for last month fell for the first time in over seven years.

Additionally, Japan's economy is expected to remain mired in recession for at least the first half of next year, as firms slash investment and exports fall.

'The outlook for Asia is going to be very, very tough,' warned chief Asia economist Glenn Maguire of Societe Generale in Hong Kong.

Recent data suggested the Asian economy 'did not just slow over the fourth quarter, it really did appear to fall off a cliff', he said.

'We believe that next year will see a recession for Asia, with the exception of China, which is in a position to use policy more forcefully to support growth,' Mr Maguire said.

The World Bank has predicted China's economy will grow 7.5 per cent next year, its slowest pace in 19 years.

Analysts say it will take some time for the positive effects of the 4-trillion-yuan (S$862-billion) stimulus package - aimed at boosting China's domestic consumption - to be felt.

The first quarter of next year could be the toughest for the region as companies reduce production and jobs to cope with the economic slump, experts say.

But a repeat of the Asian financial crisis that erupted in 1997 is still believed to be unlikely.

Standard Chartered economist Nicholas Kwan said that Asia could come out stronger 'once its cyclical excesses are addressed'.

He said: 'Asia is likely to play a more important role in the world economy as the current crisis forces structural changes to global finance.'