China Slowdown Endangers Southeast Asia: ADB; Singapore Exports Fall 8.8% in Longest Slump Since Global Crisis

China Slowdown Endangers Southeast Asia: ADB

By Dion Bisara on 9:03 am July 17, 2013.
China’s cooling economy threatens to impact growth in Southeast Asia, including Indonesia, the Asian Development Bank said in its outlook update on Tuesday. The Manila-based lender trimmed the region’s economic growth forecast to 5.2 percent this year and 5.6 percent next year in the update to its Asian Development Outlook publication. Originally, the outlook published in April forecast growth to be 5.4 percent in 2013 and 5.7 percent in 2014. “Southeast Asia’s strong start to the year is being tempered by slower growth in the People’s Republic of China and continued weak demand from advanced economies for exports,” the bank said.The ADB update came one day after Beijing released a report showing China’s economy slowing for the second quarter. The bank joined the International Monetary Fund in trimming its economic growth forecast for Asia.

China, the world’s second largest economy after the United States, expanded 7.5 percent from April to June, down from 7.7 percent in the previous three-month period.

ADB on Tuesday revised China’s gross domestic product estimate downward to 7.7 percent in 2013 from 8.2 percent. For next year, the bank slashed China’s GDP prediction from 8 percent to 7.5 percent.

Indonesia grew by 6 percent in the first quarter of this year, driven by private consumption and both private and public investment. However, Bank Indonesia, the country’s central bank, expects the country to expand by 5.9 percent in the second and third quarters this year due to export restraints in line with weakening global economic growth and commodity prices.

Household consumption and investment are forecasted to be slightly constrained as a result of deteriorating purchasing power triggered by unfavorable exports and the impact of a subsidized fuel price hike, BI said.

Inflationary pressures in the Southeast Asia region, except Indonesia, are waning on the back of declining energy and food prices, reflecting slower GDP growth across the region, ADB said.

A 44 percent increase in subsidized fuel prices is causing Indonesia to buck the trend, however, and is pushing up consumer prices while increased demand over Ramadan is likely to increase the pressure on prices heading north.

China’s cooling has impacted demand for Indonesia’s natural resources, such as palm oil, causing producers to cut prices and earn lower margins.

Singapore Exports Fall 8.8% in Longest Slump Since Global Crisis

By Shamim Adam on 8:49 am July 17, 2013.
Singapore’s exports in June extended the longest run of declines since the global financial crisis, suggesting the island’s economic growth last quarter may be lower than the government initially estimated.

Non-oil domestic exports slid 8.8 percent from a year earlier, falling for a fifth month, the trade promotion agency said in a statement on Wednesday. The median of 17 estimates in a Bloomberg News survey was for a 5.8 percent drop.

Singapore’s economy grew at the fastest pace in more than two years last quarter as services strengthened and manufacturing rebounded, the government said last week. The expansion in industrial output has not been reflected in the island’s exports, as fewer goods were shipped to Europe and the US.

“The decline in electronics demand is unlikely to turn around,” Irvin Seah, a Singapore-based economist at DBS Group Holdings, said before the report.

“External headwinds remain strong. Data from the US have been mixed and Europe is still stuck in recession.”

Gross domestic product rose an annualized 15.2 percent in the three months through June from the previous quarter, when it grew 1.8 percent, the Trade Ministry said July 12. The figures were computed largely from data in the first two months of the quarter, and revised numbers will be released next month.