Asia Pacific Economic Outlook December 2012
The December 2012 edition of the Asia Pacific Economic Outlook gives a near-term outlook for China, Japan, Malaysia, and Thailand.
Economic growth is accelerating in China, and consumer price inflation is decelerating. However, the Chinese economy still faces significant uncertainties, including a decline in foreign direct investment and political leadership that is entering a transitional period.
The Japanese economy seems to have entered a recessionary phase and may contract in the last quarter of 2012. As a result, the central bank may have to support Japan’s flagging economy, but monetary policy options remain limited..
Although the Malaysian economy depends heavily on export-led growth, a spurt in domestic demand has offset weakness in the external sector, allowing Malaysia to outperform its regional peers. Despite an uncertain export sector, Malaysia will likely carry forward its growth momentum into Q4 2012.
Investment and domestic consumption propelled the Thai economy to achieve GDP growth of 1.2 percent in Q3 2012. Amid downside risks to GDP growth, the central bank is expected to keep its policy rate unchanged for the remainder of the year. While year-on-year growth rates are impressive due to low base effects, it is difficult to ascertain the real momentum of the economy.