Asia Pacific Economic Outlook
The July 2012 edition of the Asia Pacific Economic Outlook gives a near-term outlook for China, India, Singapore, and Thailand.
Economic performance in China is disappointing business leaders, consumers, and even economists who were hoping for a rebound. A substantial slowdown in Europe—China’s largest export market—and the uncertainty surrounding the future of the Eurozone is looming heavily on China’s economic outlook. Furthermore, loosening monetary policy is failing to produce positive results.
GDP growth is likely to moderate in the coming quarters, and growth forecasts for the 2012–2013 fiscal year range between 6.0 and 6.5 percent. The country’s fiscal deficit, its current account deficit, a weakening rupee, and feeble growth in the agricultural sector are contributing to the country’s economic slowdown.
Singapore’s economy is likely to perform better in the second quarter of 2012, but growth for the entire year is expected to decline. The prospects for the economy hinge precariously on the turn of events in the global economy. If Europe’s debt crisis escalates, Singapore may experience a severe credit crunch, and growth projections may be lowered considerably.
Led by a strong performance in the services sector, the economy made a strong comeback in the first quarter of 2012 after contracting nearly 9 percent in Q4 2011. While GDP growth is back to positive territory, downside risks persist. Thailand’s reliance on export-led growth makes its economy vulnerable to a deteriorating global macroeconomic environment.