Asia Pacific Economic Outlook
China, India, The Philippines, Singapore, South Korea
The January 2012 edition of the Asia Pacific Economic Outlook (download here) gives a near-term outlook for China, India, The Philippines, Singapore, and South Korea.
There is a risk that China’s slowdown could become more pronounced, given waning European demand for exports, problems in the property market, and the potential for defaults by property and public-sector borrowers. On the other hand, looser monetary policy and further measures could boost the economy.
India will likely face significant challenges in 2012. After a period of monetary tightening designed to curtail inflation, the economy is slowing faster than anticipated due to economic headwinds from abroad. Moreover, the rupee dropped sharply, hurting external debtors and increasing the country’s import bill.
Tumbling exports and a slowdown in remittances from overseas workers will likely impact economic growth in The Philippines. The country may come to rely more on domestic consumption and investments. Given the downside risks from global economic developments, the Philippine economy is expected to expand at a modest pace of around 3.5 percent this year.
Singapore’s economy may be headed for tough times in 2012 as the volatile world economy weighs heavily on GDP growth. Furthermore, growth in wage rates is expected to decelerate, and job creation is likely to decline. While domestic demand and regional trade may provide some respite, it may not be able to adequately compensate for lost demand from the advanced countries.
A combination of foreign and domestic forces is making South Korea’s economic and political environment increasingly dynamic. Downside risks loom large due to the regional political landscape and the country’s dependence on its export sector. The extent of any global recovery will play a major role in determining South Korea’s growth prospects in 2012.