by 趙永祥, 2019-01-03 06:59, Views(417)

Emerging Markets Economic Outlook 2018 and 2019

Emerging Markets have suffered in recent years due to low commodities prices and slower global demand. With signs that emerging markets were on the comeback trail in 2017, many analysts earlier this year believed that 2018 would be much brighter for Emerging Markets, however, there are signs that tailwinds are fading. The IMF said in its latest World Economic Outlook that this year and next, "growth in emerging market and developing economies will rise before leveling off.”

Our economists believe that there is a growing divergence between developed and developing economies. Among developing nations with economies with relatively solid fundamentals and driven by commodity exports—especially oil—growth is accelerating this year going into next. However, higher yields in the United States, the rise in energy prices and large exposure to foreign debt are putting pressure on some oil-importing countries and those with persistent macroeconomic imbalances. This mostly results in heightened volatility in their financial and equity markets, as well as sizeable currency depreciations. Let’s take a closer look at what’s expected for some of these countries in the coming year:

emerging markets economic outlook 2019

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Global and domestic headwinds are expected to impact growth in H2 and beyond. The brewing full-blown trade war between China and the United States is the main downside risk to the country’s economic outlook. Domestic threats, however, including a cooling property market and financial deleveraging, are also building. FocusEconomics panelists forecast the economy will grow 6.5% in 2018, which is unchanged from last month’s forecast. In 2019, the economy is seen expanding 6.3%.


A normalization in cash conditions following the demonetization of late 2016 and the fading of disruptions from last year’s launch of the Goods and Services Tax should facilitate the economic recovery in FY 2018. Nonetheless, risks of fiscal slippage in the run-up to elections next year, concerns over the banking sector in India, increasing global trade tensions and higher oil prices all cloud prospects. Our panel expects GDP growth of 7.3% in FY 2018, which is unchanged from last month’s estimate, and 7.5% in FY 2019.


Growth in Russia is expected to pick up this year, thanks to strengthening private consumption and firmer oil prices. An improving labor market and low inflation should buoy household spending, while higher commodity prices will support export growth. That said, high geopolitical uncertainty and the possibility of further economic sanctions remain key risks to the outlook. FocusEconomics Consensus Forecast panelists see GDP expanding 1.7% in 2018, which is unchanged from last month’s forecast. In 2019, growth is seen steady at 1.7%.


Brazil’s growth forecast was chopped for a third consecutive month as the truckers’ strike, a less supportive global backdrop and higher oil prices dent the country’s outlook. FocusEconomics panelists now see the Brazilian economy growing 1.7% this year, down 0.2 percentage points from last month’s forecast. A market-friendly outcome to October’s election remains critical to ensuring a sustainable recovery; however, this is far from certain. Next year, GDP is seen growing 2.5%.


Household spending and exports are expected to drive growth this year in Mexico. Tight job markets—both domestically and stateside—and improved private-sector lending should support private consumption, while healthy factory output in the U.S. should bolster manufacturing exports. Uncertainty over NAFTA continues to weigh heavily on investment prospects, although the odds of reaching a deal have improved in recent weeks. On politics, most analysts currently expect AMLO to govern as a centrist. FocusEconomics panelists expect growth of 2.2% in 2018, down 0.1 percentage points from last month’s estimate. For 2019, panelists see growth stable at 2.2%.


Despite a healthy first quarter, the pace of growth is expected to slow sharply this year. The loss of agricultural output following the severe drought; extremely high interest rates and currency volatility, which will weigh on investment decisions; and consumer spending constrained by low confidence and rapid inflation are seen driving this deceleration. Panelists participating in the LatinFocus Consensus Forecast foresee the economy expanding 0.4% in 2018, down 0.5 percentage points from last month’s forecast. For 2019, growth is expected to reach 1.9%.


Economic growth in Turkey will likely weaken in the coming quarters, on tighter financial conditions, shaky investor sentiment and a higher oil import bill. Exchange rate volatility, geopolitical tensions, a gaping current account deficit and elevated inflation pose downside risks. FocusEconomics panelists expect growth of 4.2% this year, which is unchanged from last month’s estimate. They see growth of 3.5% in 2019.


Higher inflation and a loss in consumer confidence should lead to a marked slowdown in consumer spending this year, denting GDP growth in Romania. Although the expansion in fixed investment should gain some strength, low EU funds absorption will limit the extent of the acceleration. Downside risks stem from widening fiscal and current account deficits. FocusEconomics panelists expect growth of 4.1% for 2018, down 0.1 percentage points from last month’s forecast, and 3.6% in 2019.


The Egyptian economy is expected to grow at a solid pace in FY 2019. This is due to higher investment on the back of increased government spending and an improved regulatory environment. Moreover, the external sector should continue to benefit from the weaker pound. However, large fiscal imbalances and the higher price of oil will weigh on prospects. FocusEconomics panelists expect GDP to expand 5.1% in FY 2019, which is unchanged from last month’s forecast, and 4.9% in FY 2020.

South Africa

Greater political stability and firm credit ratings bode well for the South African economy in 2018 as full-year economic prospects look set to largely ride out the weak first quarter. Real wage gains should support stronger household spending this year, while the government’s push to attract investment should bolster capital outlays. Nevertheless, fiscal slippage and a slow reform agenda are likely to constrain growth over the medium term. FocusEconomics analysts expect growth of 1.6% in 2018, down 0.3 percentage points from last month’s forecast, and 2.0% in 2019.


Higher oil prices, improved liquidity and increased public spending in the run-up to the 2019 elections should fuel faster growth this year in Nigeria. However, political uncertainty, as well as security concerns, continues to pose risks to economic activity. FocusEconomics panelists expect GDP to increase 2.4% in 2018, which is down 0.1 percentage points from last year’s projection. Next year, growth is seen rising to 2.9%.

Further reading:

by 趙永祥, 2018-09-21 06:30, Views(417)

Economic Snapshot for ASEAN

Date: September 19, 2018

Economy likely still growing robustly in the third quarter

According to FocusEconomics forecasts, ASEAN is set to expand a healthy 4.9% in Q3 2018, buttressed by strong domestic demand. However, this will still mark a loss of momentum from the second quarter’s 5.2% expansion, largely on sizeable slowdowns in Singapore and Thailand.

Available indicators for the third quarter point to solid economic momentum. The ASEAN manufacturing PMI—which covers all of the region’s economies with the exception of BruneiCambodia and Laos—increased in August on faster growth in output, new orders and employment. However, the uptick wasn’t particularly broad-based: exports declined and confidence remained subdued, casting doubts over whether the improvement will be sustained going forward. Moreover, industrial production figures for July were robust across the region, while export growth has stayed solid in most countries so far in the quarter, despite rising fears of protectionism.

Looking at ASEAN’s key economies, economic activity in Malaysia continues to be buoyed by fuel subsidies and the zero-rating of the goods and services tax on 1 June, which have boosted consumers’ purchasing power. However, public infrastructure spending is becoming more constrained as the government looks to rein in the fiscal deficit. In early September for instance, the government agreed to postpone the planned high-speed rail link to Singapore by two years.

The Lion City continues to perform solidly thanks to the services and manufacturing sectors, although construction remains depressed, particularly given measures to cool the property market introduced in July. Tough prior-year comparatives will see annual GDP growth slow in the third quarter. In Thailand, the overall economic picture is healthy thanks to strong manufacturing output and rising farm and non-farm incomes. However, the tourism sector has taken a short-term hit following the recent death of dozens of Chinese tourists in a boat accident. This appears to have temporarily dampened visitor numbers from the Asian giant—by far the top source of visitors to Thailand.

In Indonesia, although economic indicators point to the right direction, the economic panorama is being overshadowed by currency weakness which has seen the rupiah shed around 9% of its value against the dollar so far this year. This has led the Central Bank to intervene in the market to support the beleaguered currency and caused the government to adopt a series of measures designed to reduce demand for foreign currency, including hiking import duties on over 1,000 products.

Several other ASEAN countries, including Malaysiathe Philippines and Myanmar, have also seen their currencies depreciate over the last month as part of a broader selloff of emerging-market assets. In Myanmar, the persistent currency weakening led the Central Bank to abandon its currency trading band of plus or minus 0.8% in mid-August.

See the full FocusEconomics Consensus Forecast ASEAN report

Economic fundamentals are healthy, but trade war fears loom large

Looking ahead, growth should be robust across ASEAN. Private consumption will be supported by wage gains and strong labor markets, while global demand for the region’s exports should remain strong, despite a moderation in the pace of growth compared to the last 18 months. In addition, the economic performance of the Philippines will be supported by the government’s infrastructure push. However, public investment in Indonesia and Malaysia could be dampened by these governments’ attempts to limit imports and the fiscal deficit respectively. An escalation of the trade war between the U.S. and China is the key downside risk to growth, given the importance of both countries as export markets to the region. In addition, the likely fallout, coupled with the ongoing tightening cycle in the United States, could put pressure on the currencies of countries with weaker external positions, such as Indonesia and the Philippines. GDP growth for the region is expected to come in at 5.1% this year and 5.0% in 2019, which is unchanged from last month’s forecast.

The 2019 GDP reading reflects lower growth forecasts for Malaysia and the Philippines, an upward revision to Cambodia’s growth projection and unchanged forecasts for the rest of the region’s economies.

Our panel projects that Myanmar will be the fastest-growing economy in the region next year, with a 7.4% expansion, as it continues to benefit from structural reforms and greater economic liberalization. Among the major economies in the region, Vietnam and the Philippines should record the fastest growth. Conversely, high-income Singapore is expected to record the weakest expansion, at 2.7%, reflecting a moderation of growth towards potential.

INDONESIA | Growth stays robust, but currency concerns cloud the panorama

Growth picked up in the second quarter on stronger private and government consumption, and the economy appears to have performed well so far in the third quarter. Industrial production and tourist arrivals boomed in July, while retail sales were solid in the same month. Moreover, in August consumer sentiment was firmly in optimistic territory and the manufacturing PMI rose to a multi-year high on faster output and new orders growth. However, the external sector remains a key vulnerability, with a second consecutive monthly trade deficit recorded in August. This is putting downward pressure on the rupiah, which has reached a 20-year low against the dollar in recent weeks as part of a wider emerging-market selloff, forcing the central bank to dip into its international reserves to support the currency. As part of a broader package aimed at propping up the rupiah, the government recently announced higher import taxes on over 1,000 products.

Domestic demand should continue to underpin growth going forward, with fixed investment supported by higher commodity prices and government consumption likely receiving a boost ahead of elections in April 2019. However, tighter monetary policy, delays to public investment projects, cooling Chinese demand and U.S.-China trade tensions pose downside risks to growth. FocusEconomics panelists see GDP expanding 5.2% in 2018. In 2019, the economy is forecast to grow 5.3%, which is unchanged from last month’s forecast.                                                                       

See the full FocusEconomics Consensus Forecast ASEAN report

THAILAND | Rising incomes spur growth, but tourism sector suffers a setback

After economic growth remained robust despite easing in the second quarter, the latest data suggests that momentum has moderated somewhat in the third quarter but remained healthy. In August, the manufacturing PMI continued to ease and dipped into contractionary territory, while business sentiment softened despite staying broadly optimistic. In addition, in July the tourism sector lost some steam due to a recent tour boat accident, while the trade sector recorded a small deficit. On the other hand, manufacturing growth was robust in the same month while private consumption expanded, likely thanks to rising consumer confidence, favorable farm and non-farm incomes and solid private credit growth. In the political arena, the government is moving closer to holding general elections next year, after two bills were approved in mid-September which suggest an election will be held by May 2019 at the latest.

Softer external demand growth and rising trade war fears should result in a deceleration of economic growth in the second half of the year. Next year, a further moderation in export growth is expected on the back of heightened trade tensions. Nonetheless, the domestic economy should benefit from robust tourist arrivals, government infrastructure investment and strong private consumption. The panel projects the economy to grow 4.3% in 2018 and 3.8% in 2019, unchanged from last month’s forecast.

MALAYSIA | Government agrees minimum wage hike, continues efforts to rein in public infrastructure spending 

Recent indicators suggest the economy has gained pace in Q3. In July, industrial production growth picked up on the back of faster expansions in the manufacturing and electricity sectors, while the trade surplus widened in the same month on stronger export growth. In addition, the manufacturing PMI returned to expansionary territory for the first time in seven months in August thanks to higher new orders and output. In September, the government announced the increase and standardization of the minimum wage from 1 January 2019, which bodes well for private consumption next year. In order to rein in spending, the government signed an agreement to postpone work on a high-speed railway between Kuala Lumpur and Singapore by two years, after initially announcing it would scrap the project entirely. Meanwhile, the sales and services tax (SST) was reinstated on 1 September. However, it will not cover the revenue shortfall from the zero-rating of the goods and services tax (GST).

In H2 the economy should benefit from strong private consumption. However, economic activity is likely to moderate next year as rising trade tensions and a cooling Chinese economy dent foreign demand for Malaysian goods. Uncertainty over the fiscal position and a small revenue base pose downside risks to the outlook. FocusEconomics Consensus Forecast panelists expect the economy to grow 5.0% in 2018 and 4.8% in 2019, which is down 0.1 percentage points from last month.

MONETARY SECTOR | Inflation ticks up to an over one-year high in August

A preliminary estimate by FocusEconomics shows regional inflation inched up from 2.8% in July to 2.9% in August, which represented the highest reading since May 2017. The uptick came on the back of markedly higher inflation in the Philippines and increased price pressures in Thailand and Laos. In contrast, inflation was unchanged in Indonesia and fell in Vietnam compared to the prior month. August inflation readings for the rest of the region are still outstanding.

Going forward, inflation will be supported by higher global oil prices and solid domestic activity. Our panelists expect regional inflation to average 2.8% this year and 3.1% in 2019, which is unchanged from last month’s forecast.

by 趙永祥, 2018-09-05 23:30, Views(335)

Economic Snapshot for the G7 Countries &

Robust domestic demand leads global growth in Q2,2018

Date: August 29, 2018

Robust domestic demand leads global growth in Q2

Global growth remained strong in the second quarter despite rising trade tensions, higher oil prices and increased volatility in the financial markets. Tightening labor markets, robust investment in key global economies and still-accommodative financial conditions propelled economic activity in Q2. Moreover, despite signs of having peaked in Q1, global trade remained relatively robust in Q2. A comprehensive GDP growth estimate for the global economy put year-on-year growth at 3.4% in Q2. While the print was a notch below last month’s preliminary estimate of a 3.5% rise, it matched the result from the previous period.

Among the world’s largest economies, the U.S. continued to show enviable momentum in Q2, with quarter-on-quarter seasonally-adjusted annualized growth posting the strongest reading in nearly four years. Household spending was behind Q2’s solid performance due to an ever-tightening labor market and the effects of tax cuts. Non-residential investment continued to be another of the main growth engines on the back of lower corporate taxes. Although, surprisingly, net exports contributed notably to overall growth in Q2, it mostly reflected a surge in exports ahead of retaliatory tariffs from China, which came into effect on 6 July. Front-loaded shipments ahead of trade-punitive measures between China and the U.S. were also seen in parts of Asia.

In this regard, the U.S. slapped tariffs on USD 16 billion of Chinese imports on 23 August and China retaliated immediately with measures of the same magnitude. As a result, the bilateral trade affected by Chinese and U.S. levies amounts to USD 100 billion. The second round of tariffs came into force one day after both countries met for a two-day meeting in Washington to talk about trade issues. Although the meeting was the first major negotiation between the two countries since June, it ended with no major progress on how to resolve the bilateral trade war. Meanwhile, the U.S. is moving forward with its plans to impose tariffs on an additional USD 200 billion of Chinese imports. On the flip side, on 27 August, U.S. President Donald Trump announced that Mexico and the United States had reached a preliminary deal to revamp parts of the North American Free Trade Agreement (NAFTA), which includes the agreement that any automobile sold in Mexico and the United States will require 75% of the car’s value to be manufactured in both countries, up from the current NAFTA level of 62.5%. The key pending questions are whether Canada will join the agreement and whether Mexican President-elect Andrés Manuel López Obrador, who will assume office on 1 December, will fully endorse the terms of the accord.

Positive economic news also came from Japan and the United Kingdom. In Japan, the economy returned to growth in SAAR terms in Q2 following a short-lived contraction in Q1. Strong wage growth, reflecting a tightening labor market and summer bonuses, boosted consumer spending. Moreover, investment expanded a healthy rate partially due to works related to the 2020 Tokyo Olympics. In the United Kingdom, economic activity accelerated in Q2 as warm weather supported consumer spending and likely boosted the construction sector. That said, Brexit uncertainty continues to weigh on the UK’s economic outlook.

On the flip side, economic growth in the Euro area remained soft in Q2, expanding at the same rate as in Q1 in quarter-on-quarter terms. Although the release did not include a breakdown by components, higher inflation and subdued wage growth likely dented consumer spending.

Get the full FocusEconomics Consensus Forecast Major Economies

Strong H1 dynamics support this year’s global outlook; risks loom on the horizon

This year’s growth projections for the global economy appear to be firmly anchored. However, it mostly reflects better-than-expected economic dynamics in the first half of the year; looking forward, risks are clearly skewed to the downside. Escalating trade tensions between the United States and other major economies, especially China, represent the main destabilizing factor on the global scene. Moreover, despite being positive for some oil-exporting economies, higher oil prices are fueling inflationary pressures worldwide, threatening to erode consumer’s purchasing power.

GDP Economic Growth in Main Countries


by 趙永祥, 2018-08-24 21:00, Views(528)

Economic Snapshot for ASEAN

Date: August 22, 2018

Growth slows in Q2, further moderation likely in third quarter

A comprehensive estimate of GDP growth for ASEAN suggests that the region’s economy lost momentum in the second quarter as several countries saw their external sectors weaken. GDP is estimated to have expanded 5.2% in Q2 on an annual basis, matching the preliminary estimate but below the previous quarter’s 5.4% figure.
The slowdown was driven primarily by unexpectedly weak outturns inMalaysia and the Philippines, which both saw growth dive to over one-year lows. In Malaysia, the economy was dragged down by net trade, with imports rebounding and export growth ebbing slightly, which offset stronger domestic demand. A similar picture emerged in the Philippines, where imports surged amid the government’s ongoing infrastructure push, markedly outpacing export growth. In addition, private consumption growth in the Philippines dipped slightly, likely on the back of rising inflationary pressures taking a bite out of consumers’ purchasing power.

Thailand also saw a loss of momentum, on the back of slower government consumption growth and a waning impact from inventories. Meanwhile, a second GDP estimate also confirmed that impetus in Singapore’s economy dimmed in Q2 on slower growth in the services sector, although a resilient manufacturing sector—particularly the electronics, biomedical and transport clusters—propped up the economy.

In contrast, regional heavyweight Indonesia gained steam in Q2, helping to temper the regional slowdown. Stronger private consumption drove the improvement, with consumers likely benefiting from mild inflationary pressures thanks to government price controls. In addition, government consumption saw a boost ahead of regional elections in late June. However, in line with developments in Malaysia and the Philippines, the external sector weakened on higher imported oil prices and greater imports for investment purposes.

The third quarter has begun in muted fashion. ASEAN’s manufacturing PMI—which covers all of the region’s economies with the exception ofBruneiCambodia and Laos—dipped to a four-month low in July on slower growth in output and new orders, with all countries in the region except Indonesia recording weaker outturns. Worrying for the evolution of the bloc’s manufacturing sector going forward, optimism among firms fell to an all-time low, amid rising trade tensions between the U.S. and China—both key destinations for ASEAN exports.

On the political front, Indonesia’s president announced a fiscally cautious draft 2019 budget on 16 August. The budget aims to further reduce the fiscal deficit next year, and thus reassure markets of the country’s prudent economic management in order to protect the rupiah. This came soon after the government announced measures to reduce imports—and hence demand for foreign currency—in a further bid to support the currency, which had come under renewed pressure following the collapse of the Turkish lira in early August.

See the full FocusEconomics Consensus Forecast ASEAN report

Economic fundamentals are robust, but trade war fears cast a growing shadow over the region

Economic growth should remain healthy going forward. ASEAN economies are likely to benefit from strong labor markets, which should support private consumption, strong global demand for the region’s exports and healthy public infrastructure investment in economies such as Indonesia and the Philippines. However, an escalation of the trade war between the U.S. and China is a key downside risk to growth, given the importance of both countries as export markets, while tighter financial conditions in the region could drag on domestic demand. GDP growth for the region is expected to come in at 5.1% this year, which is down 0.1 percentage points from last month’s estimate.

This month’s GDP reading reflects lower growth forecasts for the Philippines and Myanmar. In contrast, projections for Thailand were revised up. Projections for the rest of the economies surveyed in the ASEAN region were unchanged from the prior month. For 2019, our panel sees regional growth at 5.0%.

Our panel projects that Myanmar will be the fastest-growing economy in the region this year, with a 7.0% increase expected in 2018. Conversely, Brunei is predicted to record the weakest expansion, at 1.6%. Among the major economies in the region, Vietnam and the Philippines should record the fastest growth.

INDONESIA | Growth picks up in Q2, president presents fiscally cautious 2019 budget

The economy gained some momentum in the second quarter according to recent figures. Private consumption growth picked up pace, likely aided by a solid labor market, buoyant consumer confidence and government efforts to limit inflation through subsidies. Moreover, the expansion in government consumption accelerated ahead of regional elections in late June. Fixed investment growth, however, ebbed and the external sector continued to subtract markedly from growth on surging imports. The third quarter has begun in mixed fashion. In July, the manufacturing PMI moved further into expansionary territory, while consumer confidence remained positive despite dipping from June’s multi-year high. However, the trade deficit reached a five-year high, and the weak external sector is putting pressure on international reserves and the rupiah. In a bid to strengthen the currency, in mid-August the government announced a fiscally prudent 2019 budget and a range of measures to reduce imports.

Domestic demand should continue to underpin growth in the second half of the year, with fixed investment supported by public infrastructure spending and higher commodity prices. However, tighter monetary policy could dampen growth, while rising global trade tensions, higher crude oil prices and the possibility of further pressure on the currency pose downside risks. FocusEconomics panelists see GDP expanding 5.2% in 2018, which is unchanged from last month’s forecast. In 2019, the economy is forecast to grow 5.3%.                                                                       
See the full FocusEconomics Consensus Forecast ASEAN report

THAILAND | Domestic demand fuels growth in the second quarter

Economic growth in Q2 moderated from the multi-year high in Q1, driven by slower government consumption growth and a weaker contribution from inventories. However, growth in private consumption and fixed investment accelerated, with private consumption buttressed by higher consumer confidence levels, muted inflationary pressures and higher farm incomes, and fixed investment supported by private machinery and equipment investment. The economy has begun Q3 in muted fashion; in July, business sentiment decreased on weaker order books and production, while the manufacturing PMI dipped slightly, with operating conditions broadly unchanged from June.

Going forward, economic activity is expected to slow on higher oil prices and softening export momentum, due to a large base effect and rising trade tensions. However, the economy is expected to remain strong, on the back of a robust tourism sector and a pick-up in public consumption ahead of elections scheduled for next year. A further escalation of U.S.-China trade tensions remains a downside risk. FocusEconomics panelists expect the economy to grow 4.3% in 2018, which is up 0.1 percentage point from last month’s forecast. The panel projects growth of 3.8% in 2019.

MALAYSIA | Growth slackens in the second quarter on a weaker external sector

Economic growth in Malaysia eased in Q2 on the back of a weaker external sector: The pace of growth in exports moderated, while imports rebounded from a contraction in Q1. As a result, the current account surplus narrowed sharply. However, domestic demand provided some upside. Private and public consumption growth accelerated, and fixed investment growth also increased markedly. Moreover, household consumption benefited from the reinstatement of fuel subsidies in March and the zero-rating of the Goods and Services Tax (GST) on 1 June. Going forward, however, domestic demand should moderate on the heels of expected cuts to government spending in efforts to offset the revenue lost from the GST withdrawal. Meanwhile, economic data for Q3 is still limited and July’s manufacturing PMI gave mixed messages; although the indicator rose to a five-month high, it remained in contractionary territory amid an ongoing fall in new orders.

The economy is expected to grow at a resilient pace this year and next, but growth is likely to moderate due to cooling domestic demand—chiefly because the government will attempt to rein in expenditure. Downside risks include rising trade tensions, tighter global financial conditions and uncertainty over the government’s fiscal situation. FocusEconomics Consensus Forecast panelists expect the economy to grow 5.3% this year, unchanged from last month’s forecast, and 4.9% in 2019.


MONETARY SECTOR | Inflation stabilizes in July

A preliminary estimate by FocusEconomics shows regional inflation was unchanged at 2.7% in July. Inflation rose in Indonesia, Laos, the Philippines and Thailand, while price pressures in Vietnam eased. July inflation readings for the rest of the region are still outstanding.

Several central banks have been active in recent weeks. In August, Indonesia’s Central Bank increased rates by 25 basis points to 5.50% in mid-August to support the rupiah, while the Philippines’ Central Bank opted for a 50 basis-point hike to 4.00% in order to rein in sharply rising inflation. In addition, Malaysia’s Central Bank recently loosened foreign exchange restrictions in a bid to allow local firms to navigate volatile currency markets more easily and encourage investment.

Going forward, inflation will be supported by higher global oil prices and solid domestic activity. Our panelists expect regional inflation to average 2.8% this year, which is down 0.1 percentage points from last month’s estimate. Our panel foresees inflation ticking up and averaging 3.1% in 2019.

Oliver Reynolds


by 趙永祥, 2018-06-16 22:08, Views(307)

Emerging Markets 2018 Economic Outlook

Emerging Markets have suffered in recent years due to low commodities prices and slower global demand, but analysts believe that this year will be brighter. In fact, the IMF said in its latest World Economic Outlook that the higher global growth projection for this year and next, “stems from improvements in some large emerging market and low income economies that in 2016 were exceptionally stressed.”

Our economists expect that higher commodity prices, resilient global growth and still accommodative monetary policies will boost economic activity in many of the emerging markets, although this will not be the case across the board. Let’s take a closer look at what’s expected for some of these countries in the coming year.
by 趙永祥, 2018-06-16 22:06, Views(281)

What is GDP per capita?

GDP per capita stands for Gross Domestic Product (GDP) per capita (per person). It is derived from a straightforward division of total GDP (see definition of GDP) by the population. Per capita GDP is typically expressed in local current currency, local constant currency or a standard unit of currency in international markets, such as the U.S. dollar (USD).

GDP per capita is an important indicator of economic performance and a useful unit to make cross-county comparisons of average living standards and economic wellbeing. However, GDP per capita is not a measure of personal income and using it for cross-country comparisons also has some known weaknesses. In particular, GDP per capita does not take into account income distribution in a country. In addition, cross-country comparisons based on the U.S. dollar can be distorted by exchange rate fluctuations and often don’t reflect the purchasing power in the countries being compared.

The table below shows the GDP per capita in current U.S. dollars (USD) by country for the last five years. 

by 趙永祥, 2018-06-16 22:04, Views(343)

Economic Snapshot for the CIS Countries

Date: May 9, 2018

Economy gathers steam at start of 2018, but political worries intensify

Recent data for the economy of the Commonwealth of Independent States (CIS) suggests that regional growth bounced back in the first quarter after ending 2017 on a soft note. The Consensus Forecast is for  regional GDP to have grown 2.0% annually in Q1, notably above Q4’s 1.5% expansion. Activity had slumped at the end of 2017 due to a deceleration in Russia’s economy on the back of weak investment. However, the soft growth rate was likely temporary, as higher commodity prices and low inflation boost activity in the region.

Looking at the individual economies, preliminary data revealed that growth soared in Belarus in Q1, with GDP expanding at the best pace in over six years. Healthy external demand and a robust manufacturing sector likely drove the result. Azerbaijan’s economy also gained momentum in Q1, growing at the fastest rate in over two years thanks to a strong performance by the non-oil sector. Although official GDP data has not yet been released for the remaining economies, FocusEconomics analysts expect activity to have firmed in Russia, likely boosted by household spending thanks to a tight labor market and low inflation.  

On the political front, the region has had a turbulent few weeks that have increased uncertainty. In Armenia, mass protests forced veteran leader Serzh Sargsyan to resign on 23 April, and the parliament is set to elect a new prime minister on 8 May. The protests were triggered by what was seen as a power grab, after Sargsyan—who had served the maximum two terms allowed as president—was elected prime minister by his ruling Republican party. Opposition and protest leader Nikol Pashinyan is expected to become the next leader and has vowed to take swift action to halt corruption and break up oligarchic enterprises. However, there is a large degree of uncertainty as to whether Pashinyan, a relatively unknown candidate, will be able to implement sweeping measures.

Russia’s already tense relationship with the West has soured recently, taking a toll on the ruble. As of 3 May, the ruble had fallen nearly 10% since the U.S. imposed fresh sanctions on 6 April, which target several high-profile Russian businessmen and their affiliated companies. While the U.S. has softened its stance somewhat since unveiling the measures, including stating that it would consider lifting sanctions on aluminium giant Rusal if billionaire Oleg Deripaska cedes control of the company, tensions between the nations remain high, and additional sanctions could be levied if the relationship continues to deteriorate.

Meanwhile, in Kyrgyzstan, a new government was sworn in at the end of April, after the previous administration lost a vote of confidence. However, the change in regime appears unlikely to have a pronounced economic effect. In Azerbaijan, President Ilham Aliyev held on to power in the 11 April snap election, as widely expected. The vote was boycotted by the main opposition parties over concerns of a rigged ballot.

Growth to pick up modestly in 2018

Higher commodity prices and solid household spending should fuel a slight acceleration in the CIS economy this year. Russia’s economy is seen gaining steam thanks to higher oil prices, looser monetary policy and healthy consumer demand, which should in turn support remittances growth and exports throughout the region. However, geopolitical risks remain high, particularly for Russia, and a depreciation in the ruble could limit the Central Bank’s ability to ease interest rates. In addition, Russian oil production will remain hampered by the production cut deal with OPEC. Moreover, several economies remain burdened by structural issues that will weigh on the pace of growth, and reform momentum in the region has been slow.

Regional GDP growth is expected to pick up from 1.9% in 2017 to 2.1% this year, which is unchanged from last month’s forecast and would mark the best result since 2013. In 2019, regional growth is seen stable at 2.1%. This month, a number of countries had their growth prospects revised, with forecasts for five economies downgraded, including for major player Russia. On the flip side, Armenia and Kazakhstan had their growth projections upgraded. Azerbaijan and Belarus saw no change to their projections. As for the three countries that are not included in the regional GDP aggregate, analysts upgraded the forecast for Turkmenistan, while Georgia and Ukraine saw no changes to their projections.

Uzbekistan is projected to be the region’s top performer this year, with a 5.9% GDP expansion. Turkmenistan, which is not included in the regional aggregate, is seen growing a fast 6.1%. On the other end of the spectrum, Azerbaijan and Russia are expected to be the slowest-growing economies, expanding 1.6% and 1.7%, respectively. Among the region’s larger economies, Kazakhstan is expected to grow at the fastest rate (3.5%), followed by Belarus (2.5%).

RUSSIA | Higher oil prices buffer against economic uncertainty

The economy appears to have gained some momentum in recent months after a soft end to 2017. The manufacturing and services PMIs rose in April and retail sales accelerated in March. Moreover, the Ural oil price hit the highest level since October 2014 in April, boding well for the energy sector. Outside of the domestic economy, however, the economic environment has become more uncertain in recent weeks following an escalation in tensions with the United States. Sanctions levied on several high-profile Russian businessmen and their companies sparked volatility in Russian financial markets and caused the ruble to plunge in April, threatening the inflation outlook and the Central Bank’s easing cycle. However, the U.S. has softened its stance on the sanctions somewhat since unveiling them and on 2 May granted an extension for compliance with the measures. In addition, the U.S. has stated that it would consider lifting sanctions on aluminum giant Rusal if billionaire Oleg Deripaska cedes control of the company.

The uncertain geopolitical atmosphere is casting a shadow on Russia’s economic outlook. However, an improving domestic economy thanks to a tight labor market and higher oil prices should support activity, acting as a buffer against uncertainty. FocusEconomics Consensus Forecast panelists see GDP expanding 1.7% in 2018, down a notch from last month’s forecast. In 2019, growth is seen broadly stable at 1.8%.

KAZAKHSTAN | FDI inflows support economic development

Available data shows economic activity continued growing more robustly in the first quarter than in the previous one. It expanded in March at roughly the same robust pace as in the previous month, reflecting a strong surge in oil production. Retail sales jumped in March, but overall rose more slowly in Q1 than in Q4. Moreover, exports lost traction in the first two months of the year compared to the final quarter. A deluge of foreign investment is helping to shape the country’s industrial development; Kazakhstan has one of the most favorable investment climates in the region. Recent reports suggest that the country is set to sharply reduce its exports of heavy oil products, such as fuel oil and vacuum gasoil, as it shifts to focusing on higher quality products and cutting pollution following an upgrade of its three refineries.

The economy is expected to grow more moderately this year because of a marked deceleration in exports and as the government phases out its countercyclical fiscal policy to bring the budget deficit down to 1.1% from 2.6% in 2017. Nevertheless, it should remain on a steady course on the back of recovering oil prices and rising domestic demand amid moderating inflation. Efforts to diversify the economy away from the oil sector, by encouraging investment in non-extractive industries, will be critical to boosting its resilience to external shocks. FocusEconomics panelists see GDP growth of 3.5% in 2018, which is up 0.1 percentage points from last month’s forecast, and 3.5% again in 2019.

UKRAINE | Government moves forward with IMF-mandated reform

Last year’s moderate recovery, which followed the economy’s return to growth in 2016, appears to have been sustained in the first quarter. Growth was again likely driven by robust domestic demand. Retail sales continued to expand in Q1, signaling healthy private consumption growth, which was bolstered by sustained wage growth throughout the quarter. Despite slowing in the first quarter, industrial production appears to have gotten some support from buoyant, albeit also moderating, export growth. On the political front, Ukraine’s Prosecutor General Yuriy Lutsenko stated on 2 May that the implementation of the country’s new anti-corruption court—a key condition set by the IMF for receiving fresh funds—had made progress, with the first cases expected to appear in front of the court in early 2019.

The economy is set to pick up pace this year on the back of recovering domestic demand and against the backdrop of fading effects from last year’s trade embargo, which weighed on industry. Nevertheless, growth will likely remain significantly dampened by ongoing geopolitical concerns and the slow implementation of key economic reforms, which could undermine anti-corruption efforts. FocusEconomics panelists see GDP rising 3.0% in 2018, which is unchanged from last month’s forecast. In 2019, growth is also seen at 3.0%.

BELARUS | Growth jumps in Q1

The economy started the year on firm footing, with GDP expanding a robust 5.1% year-on-year in the first quarter, outpacing analysts’ forecasts and marking the strongest increase in more than six years. Growth was driven by the external sector, which saw exports soar nearly a third in the first two months of the year, a trend that likely persisted in March. Strong external demand fueled a robust increase in industrial production, while healthy domestic demand sent wholesale and retail trade higher. Further buttressing domestic demand was a tightening of the labor market and relatively moderate inflationary pressures, which likely boosted private consumption in Q1. Meanwhile, S&P Global Ratings affirmed the country’s B rating on 9 April, citing the positive effect of tighter fiscal policy and the expected improvement of the country’s external imbalances. Nevertheless, the reversal of economic and political support from Russia continues to constitute a major risk to country’s long-term growth prospects, according to S&P.

Robust domestic demand and a strong external sector are expected to buttress economic activity this year. Household consumption growth is set to benefit from an accommodative monetary environment, while healthy demand from CIS countries, particularly Russia, and the EU should fuel export growth. FocusEconomics panelists see the economy expanding 2.5% in 2018, which is unchanged from last month’s forecast, and 2.3% in 2019.

MONETARY SECTOR | Regional inflation edges up in March

Price pressures in the CIS region rose slightly in March, although they remained at a historically low level. Regional inflation came in at 2.9% in March, above February’s 2.7%. Favorable dynamics in food prices have helped keep inflation in check. Preliminary data for April revealed that regional inflation edged down to 2.8%.

Although historically low inflation has opened space for central banks in the region to reduce interest rates, recent volatility in exchange rate markets and the stark depreciation of the ruble caused the Central Bank of the Russian Federation to pause its easing cycle on 24 April. Meanwhile, the National Bank of Ukraine also held interest rates unchanged in April amid stubbornly high inflation. 

Inflation is expected to rise by the end of the year but remain moderate by historical standards. FocusEconomics panelists see inflation ending 2018 at 4.3%, which is up a notch from last month’s forecast. In 2019, inflation is expected to inch up to 4.4% by year-end.

Angela Bouzanis

Senior Economist