Trade And Current Account Balance Forecasts

TRADE AND CURRENT ACCOUNT BALANCE FORECASTS

In addition to their regular forecasts for the major economic variables, twice a year (in February and August) we survey our Asia Pacific Consensus Forecasts panellists for their projections for exports, imports and current account balances for the next 4 years. Our panellists are also asked for their predictions for growth in the volume of goods and service exports and imports over the same period.

Our survey for Trade and Current Account Balances covers each of the countries listed below. For illustrative purposes we have included forecast tables for four countries along with a portion of the text commentary taken from our February 2010 survey below. To view a sample issue of Asia Pacific Consensus Forecasts please click the "Download Sample Issues" button below.

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e = consensus estimate from latest survey.

The global recovery has continued to gather momentum with most countries having exited recession in the latter part of last year. Stronger economic activity has been already reflected in a revival in trade data across the Asia Pacific region. Most notable, the rapid recovery in the Chinese economy has spurred an increase in intra-regional trade as Asian exporters benefited from strong demand from China. Furthermore, signs of firmer growth in key export markets such as the US and the Euro zone bode well for Asia's external sector. Emerging Asia's recovery from the global recession has outpaced other major regions in the world and this trend is expected to continue this year. Furthermore, the pickup in momentum in the global recovery has already been translated into higher industrial output across the region. With a revival in the world economy underway and growth in China gathering steam, Asian exports appear likely to strengthen further in 2010. The consensus forecast is predicting that the surpluses on China's external accounts will increase this year and next. Similarly, countries such as Singapore, South Korea, and Taiwan are expected to continue to post sizeable surpluses on both their trade and current accounts throughout our forecast horizon.

The table below shows our panellists' projections for growth in goods and services exports and imports, measured in real terms (i.e. excluding the effects of changes in trade prices). In each case, we have also calculated estimates of the contribution to growth implied by our panels' forecasts for changes in export and import volumes, measured as the change in net exports (goods and services exports minus goods and services imports) as a percentage of GDP in the previous year. This indicates whether the external sector is adding to or subtracting from overall GDP growth.

The downturn in global activity last year has meant that most countries are likely to have witnessed a decline in both export and import volumes. However, with the collapse in imports exceeding the slump in exports, the contribution from the external sector is believed to have been positive in most cases. As the global recovery gathers pace this year the consensus is predicting that growth in exports and imports will turn positive in 2010. But a sharp rebound in import volumes means that net exports are subtracting from overall GDP growth in a number of countries as a result.

e = consensus estimate from latest survey.

A portion of text from Asia Pacific Consensus Forecasts, February 8, 2010

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