RaboResearch - Economic Research

Also available our 2017 Asia-Pacific economic outlook

 

February 18, 2016

Strong economic growth in Asia has led to an impressive reduction in poverty and has been important for world GDP growth. The risks in the region seem to be increasing. China’s influence in the region is increasing via its growing role as the region’s export destination, its increasing infrastructure investments, and its initiatives like the Silk Road and Asian Infrastructure Investment Bank. Although this probably has a positive impact on the region, dependence on China could also become a risk. Other risks are the rising debt load and structural and institutional shortcomings. At the same time, we see opportunities in the area, especially for producers of consumer goods and food.

Asia-Pacific: can Asia’s convergence story continue?
Demographics will provide headwinds in the developed countries of APAC and China, and tailwinds in South Asia. While total factor productivity growth has fallen, the innovation outlook for the APAC region is still relatively favourable.

Asia-Pacific: many risks but no new Asian crisis in the making
A balance of payments crisis is unlikely in today’s Asia. Most countries have improved their current accounts and FX reserves. The rising debt load may however pose problems, although it nowadays is mainly local currency denominated

Asia-Pacific: the rise of China in a (geo)politically diverse continent
Strong economic growth has diminished poverty in the region and will swell the ranks of the middle class. But corruption levels are high, China’s influence in the region is increasing and the dispute surrounding the South China Sea may generate stability risks.

Asia-Pacific: agricultural perspectives
Asia Pacific is a decisive component in the global food chain. Asia’s large and growing population and rising incomes will continue to drive demand for food, agricultural commodities and resources. But Asia cannot produce enough to support itself.

Infographic APAC

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