east asia & pacific outlook, jan 2014
TRANSCRIPT
Ekaterine VashakmadzeWorld Bank
January 2013
Global Economic Prospects January 2014
East Asia & Pacific Region
www.worldbank.org/globaloutlook
2013 marked another year of weakening growth in East Asia and the Pacific region with growth moderating to 7.2% from 7.4% in
2012.
2013 marked another year of weakening growth in East Asia and the Pacific region with growth moderating to 7.2% from 7.4% in
2012.
2013 marked another year of weakening growth in East Asia and the Pacific region with growth moderating to 7.2% from 7.4% in
2012.
Growth in China was unchanged from the 7.7% recorded in 2012.
A one percentage point slowdown in growth in the rest of the region reflects a
moderation of economic activity in Indonesia, Malaysia, and Thailand.
Growth in China was unchanged from the 7.7% recorded in 2012.
A one percentage point slowdown in growth in the rest of the region reflects a
moderation of economic activity in Indonesia, Malaysia, and Thailand.
Source: World Bank, IMF IFS.
Figure 1. Growth in 2013 moderated reflecting a sharp slowdown in the first quarter in a number of large Middle Income countries of the region partly reflecting policy tightening aimed at unwinding
imbalances which resulted from loose policies implemented during 2007 and 2012 2
01
0Q
12
01
0Q
22
01
0Q
32
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0Q
42
01
1Q
12
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1Q
22
01
1Q
32
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1Q
42
01
2Q
12
01
2Q
22
01
2Q
32
01
2Q
42
01
3Q
12
01
3Q
22
01
3Q
3
0
2
4
6
8
10
12
ChinaIndonesiaDeveloping countries excl. China
Quarterly GDP, percent change, saar
-20
-10
0
10
20
30
40
50
60
-10
0
10
20
30
40
50
60
China MalaysiaThailand IndonesiaVietnam (RHS)
Real credit growth, % change, year-over-year
Source: World Bank, IMF, IFS, Datastream.
Figure 2. The impact of domestic adjustment was also exacerbated by a tightening of international financing conditions in the second quarter of 2013
May '13 May '13 Jun '13 Jul '13 Aug '13 Sep '13 Oct '13 Nov '13 Dec '1350
100
150
200
250
300
350
400
450
Developing countries IndonesiaVietnam China
Sovereign Bond Interest Rate Spreads, basis points over US Treasuries
Jul '12 Oct '12 Jan '13 Apr '13 Jul '13 Oct '13-60
-40
-20
0
20
40
60
China ThailandEast Asia excluding China P.R.
Import volume, % change, 3m/3m, saar
Source: World Bank, Datstream.
Figure 3. Imports contracted sharply reflecting policy tightening and contributed to stronger net-exports
Source: World Bank, Markit Economics, Datstream.
Figure 4. Business sentiment started to improve in the second half of 2013, but remains precarious
Jan '12 May '12 Sep '12 Jan '13 May '13 Sep '1340
42
44
46
48
50
52
54
56
58
60
Vietnam South Korea IndonesiaJapan China
Diffusion index, greater than 50 indicates expan-sion
May '12 Aug '12 Nov '12 Feb '13 May '13 Aug '13 Nov '13-50
-30
-10
10
30
50
70
China IndonesiaEast Asia (excl. China) Philippines
Export volume, % change, 3m/3m, saar
Source: World Bank, Datstream.
Figure 5. Regional exports rebounded following a six month period of contraction
Source: World Bank, Datstream.
Figure 6. Pressures on the regional currencies have considerably lessened from May-September tightening episode, but remain present particularly in Indonesia reflecting on-going adjustment
to external balance pressures and in Thailand related to on-going political tensions .
May '13 May '13 Jun '13 Jul '13 Aug '13 Sep '13 Oct '13 Nov '13 Dec '1380
85
90
95
100
105
110
Nominal Effective Exchange Rates (April 1, 2013=100)
Thailand
Malaysia
Indone-sia
China
Overall growth in the region is expected to stay flat at around 7.2% in 2014 and ease insignificantly to 7.1% in 2015 and
2016.
Overall growth in the region is expected to stay flat at around 7.2% in 2014 and ease insignificantly to 7.1% in 2015 and
2016.
Overall growth in the region is expected to stay flat at around 7.2% in 2014 and ease insignificantly to 7.1% in 2015 and
2016.
The region… although of a relatively low probability, the outlook would be sensitive to the risks of either an abrupt tightening of
global financing conditions, or a rapid decline in China’s investment rates.
The region… although of a relatively low probability, the outlook would be sensitive to the risks of either an abrupt tightening of
global financing conditions, or a rapid decline in China’s investment rates.
Major tail-risks have subsided but, have not been eliminated and include protracted recovery in the Euro Area and fiscal
policy uncertainty in the United States.
The region… although of a relatively low probability, the outlook would be sensitive to the risks of either an abrupt tightening of
global financing conditions, or a rapid decline in China’s investment rates.
Major tail-risks have subsided but, have not been eliminated and include protracted recovery in the Euro Area and fiscal
policy uncertainty in the United States.
In addition, although currently contained, an escalation of country-level (Thailand, for example) as well as bilateral and
geo-political tensions may undermine regional growth prospects.
Ekaterine VashakmadzeWorld Bank
January 2013
Global Economic Prospects January 2014
East Asia & Pacific Region
www.worldbank.org/globaloutlook