Economic Outlook for Southeast Asia, China and India

OECD Development Centre

English
Frequency
Annual
ISSN: 
2310-1113 (online)
ISSN: 
2310-1105 (print)
http://dx.doi.org/10.1787/23101113
Next Edition: 21 Dec 2017
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The Economic Outlook for Southeast Asia, China and India provides an update of medium-term macroeconomic trends (including five-year projections and impact of monetary easing in OECD countries on Asia), country-specific structural policy notes and a thematic focus which varies in each volume.

 
Economic Outlook for Southeast Asia, China and India 2017

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Economic Outlook for Southeast Asia, China and India 2017

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OECD Development Centre

English
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    http://oecd.metastore.ingenta.com/content/4116121e.pdf
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Author(s):
OECD
23 Jan 2017
Pages:
264
ISBN:
9789264268166 (PDF) ;9789264262485(print)
http://dx.doi.org/10.1787/saeo-2017-en

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The Economic Outlook for Southeast Asia, China and India is a bi-annual publication on regional economic growth, development and regional integration in Emerging Asia. It focuses on the economic conditions of Association of Southeast Asian Nations (ASEAN) member countries: Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Viet Nam. It also addresses relevant economic issues in China and India to fully reflect economic developments in the region. The 2017 edition of the Outlook comprises four main parts, each highlighting a particular dimension of recent economic developments in the region. The first part presents the regional economic monitor, depicting the near-term and medium-term economic outlooks, as well as macroeconomic and regional integration challenges in the region. The second part discusses the recent progress made in key aspects of regional integration. The third part presents this edition's special focus: addressing energy challenges and renewable energy development in particular. The fourth part includes structural policy country notes offering specific recommendations.

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  • Foreword and acknowledgements

    The Economic Outlook for Southeast Asia, China and India is a biannual publication on Asia’s regional economic growth, development and regional integration processes. It focuses on the economic conditions of the Association of Southeast Asian Nations (ASEAN) member countries (Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Viet Nam) and two large economies in the region, China and India. This publication evolved from the Southeast Asian Economic Outlook. Beginning with the Outlook Update, released in June 2016, the Outlook has become a biannual publication, with the main report released in the autumn and its update released the following spring.

  • Acronyms and abbreviations
  • Editorial

    Growth in Southeast Asia, China and India – what we collectively call Emerging Asia – is expected to remain robust over the medium term, backed by solid domestic demand. GDP growth in the region is forecast to average 6.2% per year over 2017-21. Despite the region’s strengths, risks remain, particularly those posed by slowing trade, China’s rebalancing and lower rates of growth, depressed commodity prices, sustained low interest rates in advanced economies, and sluggish productivity performance. One significant issue affecting Emerging Asia’s ongoing economic growth and improving well-being is the critical role of energy. Thus, this edition of the Economic Outlook for Southeast Asia, China and India includes a particular focus on the energy challenges that will shape the region’s development, including growing demand, the prospects of renewable energy and private investment in the sector.

  • Executive summary

    The 2017 edition of the Economic Outlook for Southeast Asia, China and India focuses on four main areas: the regional economic outlook up to 2021 (Chapter 1), recent developments in regional integration efforts (Chapter 2), developing renewable energy (Chapter 3) and detailed country notes on key structural policy challenges in the region (Chapter 4).

  • Overview

    Overall, the growth prospects of the Emerging Asian economies (Southeast Asia, China and India) are expected to remain robust over the medium term amid global economic uncertainty. Emerging Asian countries will see real gross domestic product (GDP) growth of 6.5% in 2016, 6.4% in 2017 and 6.2% per year over 2017-21, below the rates seen in the recent past (Table 1). Growth rates and trends will vary across the region, however. While China’s gradual slowing will continue, growth will remain strong in India – exceeding 7% per year. Amongst the ASEAN-5, the Philippines and Viet Nam are expected to remain in the lead. Growth should see improvement in Indonesia and Thailand, but decline in Malaysia, particularly, in the near term. The CLM (Cambodia, Lao PDR and Myanmar) can expect continued high rates of growth, with more than 8% growth in Myanmar. Private consumption will continue to be an important factor of growth in most countries, particularly as exports grow slowly. Infrastructure also contributed to growth in many countries in the region. Overall, fiscal balances will worsen slightly in the medium term.

  • Economic outlook and macroeconomic assessment for Emerging Asia

    The growth prospects of the Emerging Asian economies are expected to remain robust, though growth rates and trends will vary across the region. China’s growth will continue to slow but will remain strong, while India’s growth will remain high. The Philippines and Viet Nam will lead growth among the large ASEAN-5 economies. The lower-income CLM countries (Cambodia, Lao PDR and Myanmar) will continue their catch-up with the highest growth rates in ASEAN. Private consumption should continue to make a large contribution to growth. Despite largely favourable growth outlooks, policy makers in the region will need to pay careful attention to potentially important international and domestic downside risks associated with slowing export growth, persistent low interest rates in the advanced economies and sluggish productivity growth.

  • Regional integration challengesin ASEAN and Emerging Asia

    2016 marks the first year of the establishment of ASEAN Economic Community. Progress on regional integration in Emerging Asia has been mixed, with relatively more achieved in the areas of trade in goods, trade in services, infrastructure and connectivity and the initiative for ASEAN Integration (IAI) in recent years. More concerted effort needs to be made in other areas that are lagging behind, such as SMEs, competition and consumer protection, as well as intellectual property. To ensure that AEC can be achieved by 2025, regional commitments need to be aligned with timely domestic reforms. This is crucial in producing a highly integrated, resilient and inclusive ASEAN community over the long term.

  • Developing renewable energyin Emerging Asia

    While Emerging Asia is blessed with vast potential for renewable energy, additional efforts are needed for the countries to achieve their respective targets for renewable energy. Economic support for renewable energy has in many cases proven too low to provide cost recovery for project developers, which partly reflects the challenge of securing sufficient funding. The current subsidies for renewable energy should be considered as temporary measures to accelerate the declining cost of these technologies, in order for them to become competitive with conventional energy sources (i.e. reach grid parity). Hence, the policy mechanisms for renewable energy should be designed to incentivise cost-efficiency and deployment effectiveness at the same time. Obstacles such as grid issues, distorted energy pricing and administrative hurdles must also be overcome in order to maximise the potential of renewables. In this context, renewable energy could play a significant role in supplying the rapidly growing energy demand in Emerging Asia while limiting greenhouse gas emissions from the energy sector.

  • Structural policy country notes

    Domestic structural reform is critical for long-term sustainable growth and further regional integration in Emerging Asia. To sustain the robust economic growth, countries in the region need to cope with several structural policy issues. These structural policy country notes highlight several key areas for reform in each of the ASEAN member countries, China and India. Some common priority areas for reform in the region include infrastructure, education and skill development, tourism, FDI, and energy, though the challenges faced in each country are unique and varied. These notes discuss current policy environments and include recommendations for achieving development goals. Where relevant as examples for Emerging Asian policy makers, the experiences of OECD member countries are also shared.

  • Statistical annex
  • Special Supplement: August 2017 Update

    The Special Supplement of Economic Outlook for Southeast Asia, China and India 2017 focuses on recent macroeconomic developments. The report deems that with trade gradually recovering and private consumption remaining resilient, ASEAN, China and India are all likely to post higher growth rates this year. This sanguine view is supported by the rise in the industrial production and consumer confidence indices in a number of economies. Prominent external risks to Emerging Asia’s growth include a more aggressive monetary policy contraction in the United States (especially if echoed by other advanced economies), a more inward-looking US trade policy and risk of protectionism in services sector. The expansion of economic activity in Southeast Asia maintained a steady pace in 2016 while growth eased in India and firmed in China.

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