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Asian economists have maintained steady growth forecasts for their economies in 2018 and beyond despite recent changes in the business environment, including increased trade tensions between the United States and China and the United States. market concerns in some emerging economies. predictions on exchange rates and interest, towards a weaker currency in countries such as Indonesia, the Philippines and India and higher interest rates throughout the region . In addition, economists' concerns have risen sharply in the face of increased trade protectionism and the potential impact of US rate hikes faster than expected, according to a survey.
The Japan Center for Economic Research and the Nikkei 28, collecting 40 responses from economists and analysts from the five largest members of the Association of Southeast Asian Nations- East – Indonesia, Malaysia, Philippines, Singapore and Thailand – and India
India remains stable. The growth forecast of ASEAN5 for 2018 was 5.0%, unchanged from the previous survey of March. The outlook for Thailand has been revised upwards by 0.3 point, supported by strong exports and domestic demand. "Growth seems stronger supported by external and domestic demand," observes KT ZMICO Securities' Thammarat Kittisiripat in Thailand
The boom in semiconductor and other goods exports is expected to continue longer than expected in Singapore and Malaysia. "The strong recovery in exports seems to be sustained" in the second half of 2018, said Manu Bhaskaran of Centennial Asia in Singapore
The Philippines is expected to maintain strong growth supported by domestic factors. The growth forecast for 2018 was 6.8%, unchanged from the previous survey. Growth "will be supported by strong household spending, sustained expansions of [both] government and investment spending," according to Pauline Revillas of Metrobank
The Indian economy is expected to find a trajectory of strong growth. The forecast for 2018/19 was 7.4%, up 0.7 percentage point from the 6.7% achieved in 2017/18, when the economy temporarily slowed due to confusion before the # 39 introduction of the new goods and services tax in July 2017. The 2018/19 projection was unchanged from the March survey. "We expect the momentum to continue … during the 2018/19 fiscal year," said Dharmakirti Joshi of CRISIL in India
Significant changes are however being made to the projections of exchange rates and interest rates in Asian countries. . With the acceleration of rising interest rates Interest in the United States, the pressure on the depreciation of the currency has intensified over the past three months. In late June, the Indonesian rupiah fell to 14,404 against the dollar, a fall of about 4% in three months despite the three rate hikes of the central bank in May and June. Economists expect the trend to continue in 2018 and further interest rate increases have been planned
The Indian rupee has reached a historic lows of 69.09 against the USD on June 28th. Continued rise in oil prices and rising inflation, warns Punit Srivastava of Daiwa Capital Markets India
In the Philippines, the inflation rate forecast for 2018 has been revised upwards 0.3 points compared to March. It is above the upper limit of the central bank's target range of 2-4%. This increase is due in part to January's tax reforms and may prove temporary, but "upward pressure may continue due to fluctuating global oil prices," said Carlo Asuncion of Union Bank of the Philippines. All economists predict a weaker peso by the end of 2018.
Market-related risks are a concern. Currency depreciation emerged as the biggest risk in Indonesia and India, and the second largest in the Philippines. The impact of US monetary policy was considered the second highest risk in Indonesia, Singapore and India, and the third highest risk in the Philippines.
Asian economists, however, take the rise of protectionism very seriously. This was the biggest risk in Singapore, Malaysia and Thailand. In the JCER rating system, where a score reaches 60 or higher while all economists consider an item as one of the three biggest risks, the scores for "rising protectionism" were 70 or higher in these categories. three countries, indicating an "alarming" level of risk. Protectionism is considered the second and third biggest risks in India and Indonesia respectively
The survey also asked economists to identify potential developments that could have a positive and negative impact on Asian economies. whole. Attention to the trade war between the United States and China and relevant trade disputes far outpaced any other negative developments. "The trade war between the United States and China will have an impact on the supply chains of goods that are priced in the United States and China," warned Manokaran Mottain of Alliance Bank in Malaysia. "The trade war is a major risk to global economic growth," said Amonthep Chawla of CIMB Thai Bank
For more details about the survey, including a complete list of respondents, please consult the JCER website:
http://www.jcer.or.jp/eng/asia/consensus.html
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