Asia Pacific Economic Outlook
The March 2013 edition of the Asia Pacific Economic Outlook gives a near-term outlook for China, India, Myanmar, and Philippines.
Economic recovery from the slowdown in 2012 has been weaker than anticipated. Chinese leadership is hinting at possible reforms, and the government is beginning to revisit income distribution as segments of the population move from rural to urban areas.
The Indian economy is showing early signs of a recovery, suggesting that the worst may be over. The government laid out a fiscal consolidation plan, which coupled with a moderation in wholesale prices, gives the central bank some flexibility to reduce interest rates. Furthermore, the buoyancy of equity markets and an uptick in portfolio investments underscores the return of investor confidence which augurs well for the Indian economy.
Political reforms and economic liberalization are resulting in the easing of trade sanctions, the resumption of international lending, and an increase in foreign investments. Additionally, rising domestic consumption and tourism will likely result in moderate growth through 2013. However, the country’s economic challenges include infrastructure, rising prices, transparency, workforce skills, the possibility of weakening exports in the event of a slowdown in the global market.
Domestic consumption, government spending, and business investments will likely help the Philippine economy grow at a moderate pace this year. Business investments may further rise with an imminent credit rating upgrade and government plans to relax select foreign ownership restrictions. However, exports are an area of concern, given a slowdown in global demand.