Asia Pacific Economic Outlook - July 2010
The July 2010 edition of the Asia Pacific Economic Outlook gives a near-term outlook for China, India, Malaysia, and Singapore.
- China – Are financial markets overreacting? This won’t be the first time. There is evidence that China’s economy could cool off next year given the latest mix of policies. Global demand appears to be faltering and if China’s trade sector weakens and this is not offset by stronger domestic demand, overall growth could be threatened. Still, forecast growth of roughly 8 to 9 percent in 2011 seems reasonable.
- India – The euphoria surrounding India’s resilience during the global recession is justified. The manufacturing sector expanded in the current fiscal year and exports are beginning to pick up as well. But a successful monsoon is imperative if the economy is to grow at the forecast rate of over 8 percent. Runaway food inflation, widespread outcry against the government’s recent decision to decontrol petrol prices, and a large fiscal deficit could derail economic prospects ahead.
- Malaysia – In its endeavor to transition into a high-income country, Malaysia recently adopted several policy measures and economic reforms. While the success of these proposals remains unclear, the country’s economic recovery has been strong. Deflation – seen in the latter half of 2009 – reversed course and inflation is projected to increase gradually in 2010. Malaysia’s government also announced plans to cut spending and reduce its fiscal deficit to 5.6 percent of GDP.
- Singapore – Developments in the global landscape had a positive impact on the Singaporean economy and the upsurge in domestic demand was also noteworthy. Reigning in inflationary pressures will be a challenge for monetary authorities. The central bank recently re-centered the policy band for the Singapore Dollar upward and away from its zero appreciation stance. Going forward, the firm exchange rate policy will likely help the Singapore Dollar maintain a strong position against a basket of currencies. Whether this shift in policy achieves the desired results remains to be seen.
- Asia Pacific Economic Outlook - July 2010 (2029.93 KB)
Published 22 July 2010; 8 pages; A Deloitte Research report.
