Asia Pacific Economic Outlook - August 2010 |
The August 2010 edition of the Asia Pacific Economic Outlook gives a near-term outlook for China, Japan, Taiwan and Vietnam.
- China – The Chinese authorities are undertaking a tough balancing act dealing with inflation, property prices and the exchange rate policy. Efforts to cool off the property market and impede speculative buying met with some success recently, but risks still remain. Part of the government’s balancing act will be to assist a smooth slowdown in exports while promoting accelerated growth of domestic demand – all without fueling asset price bubbles.
- Japan – A revival in global demand might help Japan turn in one of its best years yet. In fact, the country is on target to achieve GDP growth of more than 3 percent – the highest in nearly two decades. But the country’s economy cannot support itself on global demand alone. Looking ahead, Japan’s strong revival in 2010 is likely to be muted due to weak domestic demand, stringent fiscal constraints, massive public debt, and a lack of aggressive monetary policy. Look for the economic recovery to continue through 2011, but at a slower pace.
- Taiwan – Over the past few months, the Taiwanese economy has been operating at near or above potential thanks to strong investment and export growth. Domestic demand, on the other hand, has been unimpressive but is likely to catch up as the labor force recovers. The outlook therefore calls for strong economic growth in 2010, after which Taiwan’s economy may experience some moderation.
- Vietnam – Currently one of the fastest-growing countries in the region, Vietnam endured the economic crisis far better than its neighbors due to strong domestic demand, aggressive policy reforms and exports of non-manufacturing goods. Yet policymakers will face a tough challenge ahead as they attempt to rein in ballooning inflation, manage the fiscal deficit and tackle a depreciating currency.
Asia Pacific Economic Outlook - August 2010
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