Muted 2013 looms for Asian economies
October 12, 2012, 1:55 pm TWN
BANGALORE -- Asian economies will likely register another year of weak growth in 2013, despite pockets of mild recovery expected in some countries as central banks continue to keep policy accommodative, a Reuters poll showed.
But much will hinge on whether China, Asia's largest economy, can pull out of its downtrend this year, if the U.S. economy can continue to gain traction and if the eurozone can contain its prolonged debt crisis.
Forecasts for nearly all of the 12 economies polled in October were downgraded from the last quarterly poll conducted in July.
"Next year will probably be quite a difficult year for most Asian economies," said Vishnu Varthan, economist at Mizuho Corporate Bank.
"A lot of these economies still have their umbilical cords tied to China and whether China eases policy and its magnitude will probably decide the course of growth in the region."
After starting off 2012 in relatively good shape compared to their Western peers, one Asian economy after another began quickly succumbing to the global downdraft as the year progressed and demand for the region's exports deteriorated in the United States, Europe and then China.
China is scheduled to publish third-quarter GDP data next week, with investors anticipating a seventh straight quarter of slowing growth, and economists were reluctant to make fresh forecasts so close to the release date as they run the risk of having to immediately revise their assumptions.
The last Reuters poll of economists four weeks ago was taken in the wake of weaker-than-expected data for August and revealed a sharp cut to their third-quarter growth call to 7.4 percent year-on-year from a 7.9-percent consensus forecast just two months earlier.
Investors have repeatedly pushed back their expectations of when China's economy would hit the bottom of the current growth cycle. The consensus view at the start of 2012 was that the first quarter would be the nadir. It has since moved to the third quarter, with the economy set for its slowest full year of growth since 1999.
Reuters polls also showed that Asia's second-largest economy, Japan, is stumbling and likely shrank in the third quarter as the slowdown in China and the eurozone's woes take a bigger toll on the export-reliant nation than previously anticipated.
The economy is expected to grow just 0.1 percent in the fourth quarter after a predicted 0.1-percent contraction in the third quarter, the poll of 26 economists taken Oct. 2-9 showed.