Amid a weak and uneven global economic rebound, a general malaise pervades the Asian economic outlook, according to a report from the Manufacturers Alliance for Productivity and Innovation.
The Asian Manufacturing Outlook provides forecasts for Japan, South Korea and a group identified as “Developing Asia” (China, India, Indonesia, Malaysia and Thailand).
China's exports were unable to offset the slowness in domestic demand, Japan's recession is reinforcing regional weakness, and the promise of new leadership in India will take time to realize. Economic activity in the other areas was sluggish to mixed in 2014, but the outlook's co-authors, Cliff Waldman and Yingying Xu, see shades of optimism for 2015.
Japan's economy contracted in the second quarter of 2014, primarily because of weak global demand, consumer adjustments to positive inflation, and a sales tax increase, but nascent signs of recovery have begun to appear. The MAPI Foundation projects GDP growth of 0.9 percent in 2014 and 1.6 percent in 2015, and industrial production growth of 2.7 percent in 2014 and 2 percent in 2015.
Improvement in external demand, the finance ministry's increased fiscal spending goal, and service sector deregulation should assist the South Korean economy in 2015. The forecast is for a 3.5 percent GDP advance in 2014 and 3.6 percent growth in 2015. Industrial production is anticipated to grow 1.6 percent in 2014 and 3.6 percent in 2015.
While China's economic stimulus efforts will likely continue, Waldman and Xu expect the nation's GDP growth to slow from 7.2 percent in 2014 to 7 percent in 2015. Year-over-year growth of industry value-added is expected to decline from 8.4 percent in 2014 to 8.1 percent in 2015.
Over time, India will likely become a much-needed positive for Asian growth, but the economic promise of new political leadership will need time to evolve. The MAPI Foundation anticipates GDP increases of 5.4 percent in 2014 and 6.7 percent in 2015. Industrial production is forecast to grow 3.8 percent in 2014 and 5.8 percent in 2015.
GDP in Developing Asia as a whole is forecast to grow 6.5 percent in 2014 and 6.7 percent in 2015. Industrial production is expected to increase 7.4 percent in 2014 and 7.5 percent in 2015.
