In
a clear sign that euro zone turbulence and the resulting sharp global downturn
are hitting Asia's industrial- and export-driven economies, 2012
consensus growth and manufacturing forecasts have continued to
decline in our latest survey. Although manufacturing is likely to have contributed
to the estimated 5.9% (y-o-y) Q3 expansion in Singapore,
the sector most probably encountered a marked slowdown as external demand
wanes for the country's export products. The Monetary Authority of Singapore
predicts that the economy will stall over the next nine months as global
growth cools. Indeed, our panel's growth forecast for next year has now
been slashed to 3.8% from 5.5% in March. Meanwhile, stubborn inflation of
around 5% has complicated policy action, but with price rises set to moderate
in 2012, policymakers – like many of their Asian counterparts – are now
shifting their priority to supporting growth. Elsewhere, broad-based weakness
was reflected in Malaysia's industrial production numbers
in September and, although exports have held up surprisingly well thanks
to commodities shipments, downside risk is mounting.
Gross Domestic |
Historical Data | 2011 Forecast | Consensus Forecasts for 2012 from Survey of: | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| * % change on previous year | 2007 | 2008 | 2009 | 2010 | Jun.'11 | Jul. | Aug. | Sep. | Oct. | Nov. | |
| Malaysia |
6.5 | 4.8 | -1.6 | 7.2 | 4.4 | 5.5 | 5.4 | 5.4 | 4.7 | 4.3 | 4.1 |
| Singapore | 8.8 | 1.5 | -0.8 | 14.5 | 5.0 | 5.3 | 5.3 | 5.2 | 4.7 | 4.1 | 3.8 |
| Taiwan | 6.0 | 0.7 | -1.9 | 10.9 | 4.4 | 5.1 | 5.1 | 4.8 | 4.2 | 3.8 | 3.5 |
| Thailand | 5.0 | 2.5 | -2.3 | 7.8 | 2.6 | 4.9 | 4.9 | 4.8 | 4.6 | 4.0 | 4.3 |
Similarly,
in Taiwan, milder industrial activity and a reduction in
export orders followed a lacklustre Q3 GDP report which showed activity
contracting by 0.3% (q-o-q) and annual growth registering the softest pace
in two years (3.4%). Furthermore, our panel's 2012 growth forecast of 3.5%
ranks Taiwan's outlook as one of the weakest in the region. Thailand,
meanwhile, has been experiencing devastating floods. Severe economic disruption
at a time of reduced overseas demand has dented 2011 forecasts for all domestic
indicators, not least GDP growth which has dropped 1.1 percentage points
since our October survey. In contrast to its South East Asian neighbours,
though, 2012 growth forecasts have strengthened in anticipation of an increase
in flood-related recovery projects. The consensus believes that manufacturing
bottlenecks could linger, however, while widespread destruction of agricultural
crops might feed through into higher prices. The previously hawkish central
bank paused its tightening cycle in October, having hiked rates by 225 basis
points since July 2010.
Manufacturing Production* |
Historical Data | 2011 Forecast | Consensus Forecasts for 2012 from Survey of: | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| * % change on previous year | 2007 | 2008 | 2009 | 2010 | Jun.'11 | Jul. | Aug. | Sep. | Oct. | Nov. | |
| Malaysia |
1.4 | 0.7 | -10.0 | 11.0 | 3.9 | 5.8 | 5.5 | 5.4 | 4.4 | 4.1 | 3.8 |
| Singapore | 5.9 | -4.2 | -4.1 | 29.7 | 7.6 | 8.1 | 8.4 | 6.8 | 7.1 | 5.9 | 5.0 |
| Taiwan | 8.3 | -1.6 | -8.0 | 28.6 | 7.6 | 9.8 | 9.9 | 9.6 | 7.8 | 6.5 | 6.1 |
| Thailand | 8.1 | 3.9 | -7.2 | 14.4 | 0.5 | 8.0 | 7.4 | 7.4 | 7.4 | 6.5 | 6.2 |
Taken from Asia Pacific Consensus Forecasts, November 2011.