Asia Pacific Economic Outlook - October 2010
The October 2010 edition of the Asia Pacific Economic Outlook gives a near-term outlook for China, Indonesia, Japan, and Thailand.
- China – There is global anxiety about the rate of deceleration in China but the good news is that Chinese authorities have successfully engineered a soft landing for the country’s economy. Shifting the economy more toward domestically-driven growth, dealing with the economic consequence of a deflated property bubble in coastal cities and allowing the currency to rise in value are key concerns for policymakers. Look for strong, but moderated GDP growth in 2011.
- Indonesia – A surprisingly strong performer in Asia, Indonesia’s economy held on strong during the economic crisis. A limited dependence on exports, healthy domestic consumption and a solid dose of government stimulus helped the country withstand the recession. Tackling rising inflation and a strengthening currency will be key challenges for policymakers. Indonesia’s economy will likely continue to grow between 5.5 and 6 percent in 2011.
- Japan – Unlocking the mystery of Japan’s economic future hinges on cleaning up the political conundrums, overcoming chronic deflation and the success of its quantitative easing measures. Furthermore, the country’s near term outlook depends heavily on how the global economy recovers. If China’s growth slows down drastically and austerity in Europe intensifies, Japan may experience a negative shock to its export revenues. GDP growth targets will likely fall below 2 percent in 2011.
- Thailand – Political instability threatened to derail the Thai economy just a few months ago, but the country’s economic recovery appears to be on track. A timely rebound in consumption, investment and tourism provided the necessary stimulus to GDP. Furthermore, the country’s strengthening currency bodes well to counter rising inflation. The economy is forecast to grow at roughly 5 percent.
