he March 2012 edition of the Asia Pacific Economic Outlook gives a near-term outlook for Australia, China, India, Indonesia, and Thailand.
Australia: Australia’s GDP is expected to expand by 2.5–3.0 percent through 2012. The country faces two significant economic vulnerabilities: economic headwinds from abroad that may threaten Australia’s export-dependent economy and housing prices, which may place pressure on the Australian banking sector.
China: China has recently experienced a decline in exports, foreign direct investment, and manufacturing because of slowing economic activity abroad. Despite recent inflationary pressures, the central bank is gradually easing monetary policy. Government policymakers are also taking actions to offset negative economic headwinds from abroad and increase consumer purchasing power.
India: For the last several months, India’s central bank has been torn between controlling inflation and maintaining robust economic growth. With industry increasingly worried about the high cost of capital and the manufacturing sector showing signs of stagnation, the central bank must quickly decide which of its limited options it must deploy in order to the economy keep chugging along.
Indonesia: Infrastructure development is paving the way for optimism in Indonesia’s rapidly emerging economy. Despite the risk of inflationary pressures, the country’s economic outlook remains favorable, and GDP is expected to grow by 6.5 percent this year.
Thailand: Thailand’s economy is getting back on its feet after a disastrous flood. The government is likely to step up public expenditure on reconstruction and disaster relief, which may introduce inflationary pressure during the latter part of the year. Meanwhile, the volatile external environment continues to threaten the stability of Thai exports.
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