Asian Economy: Overview, Growth & Development

84PC of firms in Japan see economic growth in 2022

About 84 percent of major companies in Japan expect the country’s economy to grow in 2022, driven by recovering personal consumption amid hopes that the coronavirus pandemic will subside, a Kyodo News survey showed Sunday.

In the survey of 106 companies, including Toyota Motor Corp. and SoftBank Group Corp., 13 firms predicted the economy will be flat as people remain cautious about the pandemic. But none of the firms said it will contract.

Of the surveyed companies, 84 expect growth to be moderate in the year ahead, while five see a more solid expansion.

With multiple answers allowed, 91 percent of them that expect growth cited a pickup in consumer spending, followed by 64 percent predicting the unusual situation caused by the pandemic will return to normal, 35 percent forecasting that capital investment will rise, and 19 percent looking forward to a recovery in the U.S. economy. The overall percentage of firms forecasting growth in the world’s third-largest economy is up from the 74 percent in a similar Kyodo News poll a year earlier. Prime Minister Fumio Kishida has vowed to minimize the spread of the Omicron variant of the coronavirus while moving swiftly to get the economy back on track.

China’s economy could overtake us economy by 2030

China’s economy will increasingly rely on state investment, high-tech development and domestic consumption – with less input from its past staple of export manufacturing – as it stands to overtake the United States in the coming decade, analysts predict. China’s GDP should grow 5.7 percent per year through 2025 and then 4.7 percent annually until 2030, British consultancy Centre for Economics and Business Research (CEBR) forecasts. Its forecast says that China, now the world’s second-largest economy, would overtake the No. 1-ranked U.S. economy by 2030. Credit insurance firm Euler Hermes made a similar forecast. Chinese leaders have pushed over the past decade to rely more on value-added services over traditional factory exports, state media have said. The Sino-U.S. trade dispute and early 2020 workplace closures due to COVID-19 have added pressure on manufacturing.

Indonesia to ratify RCEP in 2022

Indonesia, Southeast Asia’s largest economy, will likely ratify its membership of the Regional Comprehensive Economic Partnership (RCEP) early next year, its chief economic minister said on Friday. The China-backed RCEP, the world’s biggest trade bloc, is set to enter into force on Saturday, January 1, 2022, after seven nations in Southeast Asia, as well as Australia, China, Japan, New Zealand and South Korea ratified the pact earlier this year. Details in the RCEP were agreed upon by leaders of 15 countries covering nearly a third of the global population and about 30 percent of its global gross domestic product (GDP) in November 2020. Indonesia has been seeking parliamentary approval to ratify the agreement for months. Chief economic minister Airlangga Hartarto said a parliamentary commission overseeing trade rules had approved the ratification and its endorsement will be brought to a wider parliamentary vote in the first quarter of 2022. President Joko Widodo will sign off on the ratification after parliamentary approval, he added. Indonesia will likely book a trade deficit with members of RCEP in the early period of its implementation, but by 2040, the pact could boost Jakarta’s trade surplus to $979.3m, Airlangga said.

Malaysia’s economy to grow faster this year at 5.2pc

The Malaysian economy is expected to grow at 5.2 percent this year, an improvement from the projected 3.4 percent growth for 2021, supported by the reopening of economic and social sectors, think tank Socio-Economic Research Centre (SERC) said. Executive director Lee Heng Guie said SERC’s forecast is lower than the government’s projection of 5.5 percent to 6.5 percent as he felt that private consumption is expected to face headwinds in 2022. “I expect private consumption to recover, but there are some headwinds, mainly inflation risk and high cost of living,” he said in a virtual media briefing on Tuesday (Jan 4). He also expected households to start rebuilding their savings and balance sheet, which will have an impact on the gross domestic product (GDP) growth. “Bear in mind the government’s (GDP growth) forecast (for 2022) was done sometime last October during the Budget 2022 announcement. Since then, there have been some developments, especially the unexpected pick up in inflation risk (and) the worst flood (in the country since the 2014-2015 floods),” he noted. According to Lee, private consumption is expected to grow at 5.9 percent in 2022, which is lower than the government’s forecast of 7.3 percent. There are also some sectors that he foresaw having lower growth compared with the government’s projections such as public investment and the real exports.

Vietnam seeks $15.3 bn stimulus package

Vietnam plans to spend 347 trillion dong ($15.25 billion) for the 2022-23 period to cushion the economic blow from the COVID-19 pandemic and assist businesses hurt by tough curbs, the country’s planning ministry said on Tuesday. The latest stimulus package, which is well below the proposal of 800 trillion dong submitted in November, includes measures to reduce bank loan interest rates by about 1 percentage point and delay loan payments for businesses. According to the plan, Vietnam’s central bank, which has plan to sell $3 billion of government bonds domestically, should stand ready to intervene in the market and stabilise foreign exchange rates if necessary. Vietnam’s economy grew 2.58 percent in 2021, slipping from a 2.91 percent expansion the year before, official data showed.

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