Asia Pacific Economic Outlook October 2012

Weathering headwinds


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Asia Pacific Economic Outlook October 2012

The October 2012 edition of the Asia Pacific Economic Outlook gives a near-term outlook for China, Indonesia, Japan, and the Philippines.

China: When exports decline

As the Chinese economy continues to decelerate, the government is trying to use policy measures to offset the headwinds from Europe that are having a negative impact on Chinese exports.

Indonesia: Maintaining expansion

The Indonesian economy is experiencing a slowdown, but it has fared better than its regional peers due to robust domestic demand and continued foreign investment. The country's GDP is expected to expand by around 6.5 percent this year. However, a recent wave of protectionist regulations and political scandals are casting a shadow on its growth prospects.

Japan: Contraction in the cards

Despite a significant upward revision to Q1 GDP growth, the outlook for the Japanese economy has not improved significantly. While the central bank has adopted an aggressive monetary stance, deflation continues to pose a challenge. Exports, manufacturing, and consumption have decelerated, and the economy is likely to contract in the third quarter of 2012.

Philippines: Growth from within

Strong domestic consumption and investment are expected to drive growth and offset a decelerating export sector. The government will likely continue to support consumption and increase spending on infrastructure, which may help the economy grow at a modest pace of around 5.5 percent this year.