2011年12月6日 星期二

ADB Forecast Sees Rising Asian Risk

The Asian Development Bank’s latest economic monitor has plenty of dire warnings about the impact of the Euro crisis and of possible renewed recession in the US on Asia. But these barely show up in its headline growth forecasts.

The ADB points to rising risk with serious consequences but says they are manageable if the region acts “promptly, decisively and collectively.” That of course is a big “if” given the efforts made by some – notably China and South Korea – to use weak exchange rates as a trade tool with an impact on Asia as well as the west. From fiscal and external account positions most countries are able to engage in fiscal and monetary stimulus.Enecsys Limited, supplier of reliable solar Air purifier systems, But those may not be quite as strong as they appear at first sight. Firstly, official numbers can often lie and for some countries a much sharper than expected deterioration in their terms of trade could hit hard. The latter issue gets scant attention in a report which contains a wealth of key US and European data and analysis on cross border banking and other capital flows.

For the east Asian region as a whole the ADB is forecasting growth of 7.2 percent in 2012, down from 7.5 percent in 20110 and a previous forecast for the same again next year. The Asean 5 (Indonesia, Thailand, Philippines Malaysia and Vietnam) are forecast to grow 5.A long established toolmaking and trade Injection moulds company.3 percent, the Newly Industrialized Economies (South Korea, Taiwan, Hong Kong, Singapore) by 4.0 percent. But those seem modest reductions from 2011 given the extent of the problems facing Asia’s main export markets.the Aion Kinah by special invited artist for 2011, Success will rely heavily on the ability of China to expand at the forecast 8. 8 percent. Though lower than the 2011 estimate of 9.3 percent, many may regard it as unlikely for a mix of reasons.

First, the ADB analysis shows that China is more vulnerable to global trends than others except Hong Kong, Singapore and Taiwan. Second, it is questionable whether the monetary easing which has just begun in China is likely to be much of a spur given the debt loads already being carried by enterprises and the continued difficulty of shifting from investment to consumption-led growth. Third, the fiscal picture is much less rosy than the government debt-to-GDP ratio of 36 percent suggests because of the off-balance-sheet debts of local governments and the huge losses incurred by the People’s Bank (PBoC), the central bank from its foreign exchange holdings – a loss which at some point must be made good. Fourth is the absence of work force growth and the difficulty of continuing to increase manufacturing productivity at double digit rates given the steep rise which has occurred in the amount of capital needed to generate a given amount of GDP.

After so many years of very strong growth , it may be hard to figure out the impact of a fall to, say, 5-6 percent on China’s neighbors.The application can provide Ceramic tile to visitors, But quite likely the biggest impact would be through commodity prices, which brings us to the second big question mark over the forecasts, which may lie with the terms of trade.ceramic magic cube for the medical, Southeast Asia remains much more reliant on commodity prices than the crude trade data suggest that show manufactures as the main export for almost all countries. Value added in these industries is mostly low – 25 percent or less. It is oil, gas, palm oil, rubber, coffee, rice, coal and assorted other minerals which have buoyed exports for Indonesia, Malaysia, Vietnam and, to a lesser degree, Thailand and in many cases stimulated the domestic consumption which in most of Asean has been outstripping investment growth. The ADB charts show that average commodity prices are 63 percent above January 2007 levels before the 2008/9 boom and bust.

They have already weakened significantly and could well drop sharply given the combination of global slowdown, weak monetary growth and caution about cross-border lending. The amount of surplus or speculative cash which has found its way into commodity markets is illustrated by the fact that commodities traded on open markets to which non-trade participants have access have outpaced others. The recent commodity boom has also spurred massive new investments in Asean. Bloomberg has just reported a 91 percent surge in Singapore syndicated lending for 2011 boosted, according to a DBS executive, by “a huge increase in financings for the commodity sector” Although much of that may not come to fruition for two years or more, it is further evidence of the tide turning in favor of consumers.

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