Regional Economic Outlook: Asia and Pacific

April 2008

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See also Executive Summary in Korean, Laotian, and Vietnamese

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2008 is shaping up as a challenging year for Asia. Activity in most economies remains fairly buoyant, but growth in the United States and, to a lesser extent, Europe is slowing sharply. Given its extensive trade and financial linkages with the rest of the world, Asia is unlikely to delink. At the same time, inflation pressures are picking up across much of the region. Moreover, the still-unfolding global financial crisis adds a dimension of uncertainty to the picture, and the balance of risks remains on the downside. However, most countries in the region are well-placed to undertake counter-cyclical policies should these prove necessary.


Executive Summary
I. Overview
  Recent Macroeconomic Developments
  Recent Financial Market Developments
  Outlook and Risks
  Policy Implications
II. Can Asia Decouple? Investigating Spillovers from the United States to Asia
  Trade and Financial Exposure to the United States
  Asia's Growth and Financial Cycles: Are They Synchronized with the United States?
  Estimating U.S. Spillovers
  Event Study: Impact of U.S. Recessions on Asia
1.1. Asian Electronics Exports: Recent Developments and Outlook
1.2. Asia's "Nontraditional" Export Markets
1.3. Impact of High Oil Prices on Asian Economies: So Far Largely Benign?
1.4. Asia: Lessons from the Subprime Crisis
1.1. Price-Earnings Ratios
1.2. Asia: Real GDP Growth
1.3. Asia: Real Export Growth
1.4. Asia: Investment Growth
1.5. Asia: Private Consumption Growth
1.6. Asia: Selected Fiscal Indicators
2.1. Export Exposure to Industrial Countries
2.2. Financial Exposure to the United States
2.3. Growth Correlation with the United States
2.4. Correlations in Stock Market Returns
2.5. Growth Spillovers Among Regions
2.6. Recent Growth Spillovers Among Regions
2.7. Globalization and Spillovers
2.8. Impact of 1 Percentage Point Decline in U.S. Growth
2.9. Impact of U.S. Recessions
2.10. Impact of 2001 U.S. Recession
2.11. Summary of Results: Impact of a U.S. Slowdown on Asia
1.1. Emerging Asia: Real GDP Growth
1.2. ASEAN-5: Contributions to GDP Growth
1.3. NIEs: Contributions to GDP Growth
1.4. Selected Asia: Industrial Production
1.5. Emerging Asia: Retail Sales Volume
1.6. Japan, China, and India: Exports of Non-Oil Goods
1.7. Emerging Asia: Exports of Goods
1.8. Japan, China, and India: Imports of Non-Oil Goods
1.9. Emerging Asia: Imports of Goods
1.10. Emerging Asia: Consumer Prices
1.11. Emerging Asia: Core CPI
1.12. Emerging Asia: Producer Prices
1.13. Emerging Asia: Consumer and Producer Prices
1.14. Price-Earnings Ratio
1.15. Nominal Effective Exchange Rates
1.16. Selected Asia: Stock Market Indices
1.17. Selected Asia: Net Equity Inflows
1.18. Hedge Funds: Total Return
1.19. Selected Asia: Credit Risk
1.20. Selected Asia: Bank Loan-to-Deposit Ratios
1.21. Liquidity Risk: Composite Indicator
1.22. Japan Domestic Bond Issuance: Samurai Bonds
1.23. Emerging Asia: Quarterly GDP Growth Forecasts
1.24. Selected Asia: Private Sector Credit Growth
1.25. Selected Asia: Changes in Policy Rates Since January 1, 2007
1.26. Selected Asia: Private Sector Inflation Forecasts
1.27. Selected Asia: Real Monetary Conditions Indices
2.1. Impact of 1 Percentage Point Decline in U.S. Growth: Singapore
2.2. Impact of 1 Percentage Point Decline in U.S. Growth: Taiwan Province of China
2.3. GEM Simulation: Spillover from U.S. Slowdown (Without Confidence Effect)
2.4. GEM Simulation: Spillover from U.S. Slowdown (With Confidence Effect)
2.5. GEM Simulation: Contribution of Countercyclical Policies
2.6. Change in Output Gap and Change in Fiscal Policy in Asia
2.7. Change in Output Gap and Change in Monetary Policy in Asia