What to expect in Asia for 2017
Click on the image to open a larger version
ASEAN: Activity to moderate in 2017
This year, developments in the external sector and global politics will continue to influence ASEAN’s growth story. The policy decisions of a more protectionist U.S. under President Donald Trump have the potential to reverberate throughout the region. Trump’s decision on 23 January to pull out from the 12-country Trans-Pacific Partnership (TPP) has created uncertainty over the future of the deal, which was seen as particularly beneficial for Vietnam’s economy. At this stage, it is unclear whether the agreement will move forward without the U.S. or if a new alliance could take its place. Brexit will also continue to play a role in ASEAN’s growth story as Singapore is particularly exposed to the potential fallout. Domestically, the timing of elections in Malaysia and Thailand will continue to be monitored, and early votes could take center stage.
Economic dynamics are expected to weaken slightly this year on slower growth in Singapore and the Philippines. The FocusEconomics panel sees the ASEAN region growing 4.7%, which is down 0.1 percentage points from last month’s forecast. Reduced headwinds from less monetary and fiscal stimulus will limit the economy’s momentum, but domestic demand should still remain solid overall. In 2018, the ASEAN economy is seen growing 4.9%.
This month’s 2017 growth forecast reflects a sizeable downward revision to Myanmar’s economic outlook. Estimates for 7 of the 10 economies in the region, including Indonesia, Malaysia, Singapore and Thailand, were left unchanged. The only economies to see brighter prospects were Brunei and the Philippines.
Growth trends are expected to be divergent in the region. The Philippines and Vietnam will be among the top performers, with projected expansions of 6.4%. On the other side of the spectrum, Singapore will grow a slow 1.6% as the country is highly vulnerable to global events and is facing a cooling property market. Our panel of economists sees regional giant Indonesia expanding a healthy 5.2%, while Malaysia should grow 4.3%.
East & South Asia: Risks to 2017 economic outlook appear balanced
This year, the ESA economy is expected to perform at a similar pace to that of in 2016. China’s ongoing economic transition, which entails weaker but more sustainable growth, will be compensated for by stronger economic dynamics in most countries in the region. The main exception will be Korea, as the country is immersed in a deep political crisis that is gradually feeding into the real economy. However, more dark clouds are gathering on the horizon. Uncertainty about U.S. President Donald Trump’s economic and trade policies are the main downside risk to growth, in particular due to threats from the U.S. administration to impose a tariff on Chinese goods, which could cause a trade war between the world’s two largest economies. Furthermore, a faster normalization of monetary policy in the United States has the potential to heighten financial volatility in the region.
There are, however, some silver linings amidst the gloom. The expected fiscal stimulus plan in the United States, coupled with bold government support in China, bodes well for growth in the region. Moreover, the pick-up in inflation is expected to be limited, giving central banks in the region leeway to keep their monetary policies accommodative.
After expanding 6.1% in 2016, the ESA economy is seen growing at a broadly steady rate of 6.0% in 2017—unchanged from last month’s forecast. In 2018, GDP is seen expanding at a slower pace of 5.8%.
This month’s outlook for 2017 reflects unchanged growth prospects for six of the nine economies surveyed, including the region’s powerhouse China. Projections for India, Korea and Sri Lanka were downgraded.
India and Bangladesh are expected to be the region’s fastest-growing economies in 2017 with increases of 7.4% and 6.8% respectively, followed by China, with a 6.4% expansion. At the other end of the spectrum, Hong Kong, Mongolia and Taiwan are projected to be the slowest-growing economies, with growth rates below 2.0%. Korea’s economy is seen expanding 2.4% in 2017.
5-year economic forecasts on 30+ economic indicators for 127 countries & 33 commodities.
Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the opinion of FocusEconomics S.L.U. Views, forecasts or estimates are as of the date of the publication and are subject to change without notice. This report may provide addresses of, or contain hyperlinks to, other internet websites. FocusEconomics S.L.U. takes no responsibility for the contents of third party internet websites.
Date: January 25, 2017
TagsForex Copper Tunisia Economic Debt chile MENA Argentina Central America Company News Emerging Markets Cryptocurrency Australia Brexit Agricultural Commodities United Kingdom election Asia Sub-Saharan Africa Canada Spain Base Metals Commodities France Bitcoin Exports Economic Growth (GDP) Exchange Rate Eurozone Africa Vietnam Gold precious metals China Latin America Precious Metals Commodities Unemployment rate Canadian Economy United States USA TPP Russia Italy G7 Healthcare Greece oil prices Economists TPS economic growth Banking Sector European Union GDP Commodities Iran Oil Turkey IMF Asean India Trade Colombia Investment interview Energy Commodities OPEC Asian Financial Crisis Major Economies Inflation Draghi Economic Crisis Infographic Cannabis Japan Euro Area Housing Market Base Metals Nordic Economies Mexico Germany public debt UK Consensus Forecast Portugal Venezuela South Africa Eastern Europe Brazil Lagarde scotiabank Ukraine Israel
The German economy flatlines in Q4 2019, ending a disappointing year on a sour note https://t.co/AIsAHaaJs6
2 days ago
Eurozone: Growth sinks to near seven-year low in Q4 https://t.co/d39R28oAxN
2 days ago
Poland: Growth slumps to three-year low in Q4 https://t.co/ReW9pJC4NT
2 days ago
Netherlands: Economic growth remains solid in Q4 2019 https://t.co/x5WdjajV7s
3 days ago
Australia: Consumer sentiment regains some lost ground in February https://t.co/M0yHD1lXAs
3 days ago