Asian investment and growth is dramatically slowing.This spells trouble for growth around the world. We will do another region of the world next time. In Asia the following countries, China, India, Japan, Thailand, Malaysia, Indonesia, South Korea, Russia, and Taiwan are all experiencing slower and sluggish growth rates due to internal factors and a decline in world economic growth rates as well.
If this continues expect to see slower rates almost everywhere since much of the growth in world trade and economic growth in general is due to developments in Asia.
Growth in China’s gross domestic product fell to 7.8% in the third quarter compared with a year earlier, China’s National Bureau of Statistics reported, slightly up from 7.6% in the second quarter which was the weakest since the beginning of 2009. The seventh consecutive deceleration reflected a combination of weak demand from abroad, flagging investment at home, and insufficient spending by China’s households to pick up the slack.
The fourth quarter for the year 2013 ended with 7.7% growth rate. The world’s second largest economy may expand at the weakest pace in almost 25 years in 2014. Spending on infrastructure and factories have definitely slackened.
Commentators in both the West and China have already called China’s current slump the End of the Chinese Miracle, following 30 years of 10% plus GDP growth. While it is clear that the weak global macro-environment, the ongoing Euro-crisis and the fragility of the US recovery is impacting China’s growth outlook, the country’s policy and structural issues are also significant. China’s over dependence on investment and exports, widespread participation in the economy and a repressive financial system are among others well known issues facing China’s economy today.
India’s growth slowed to 5 per cent in the 2012/13 fiscal year that ended in March, its worst performance since it grew by 3.9 percent in 2002/03.
The World Bank has slashed India’s economic growth forecast for 2014 to 4.7% from an earlier projection of 6.1%. The average annual growth rate had been 8% over the past decade but seems to be headed for a much slower pace.
This free fall in growth rate for the otherwise buoyant industry is indicative of how stubborn inflation numbers and an overall negative economic sentiment are holding back consumers from purchasing essential and nonessential consumer products, with many comparing the current period to the 2008-09 downturn.
Russia’s GDP growth is likely to remain below this year’s goal of 1.8 percent, Russia’s Economic Development Minister Alexei Ulyukayev said Wednesday.The ministry has already revised downward its GDP growth forecasts twice this year. Late last year, it expected 2013 growth to be 3.6 percent, but that figure was slashed to 2.4 percent in April and again to 1.8 percent in September.
Russia’s failure to significantly change its energy-dependent economic model under President Vladimir Putin is consigning the country to potentially decades of low growth and eroding its status as a top emerging economy.
Russia’s economic ministry cut its growth forecast for the next 2 years considerably lowering the outlook for investment and industrial production. The 2013 growth rate was lowered from 3.6% to 1.4%. This is the lowest rate since 2000. GDP growth expectations for 2014 is 2.5% and 2.8% in 2015.
This contrasts sharply with the average 7% growth rate last seen right before the 2008 global financial crisis.
Economic growth in Japan, the world’s third-largest economy, slowed to 0.5% in the July-to-September period, down from 0.9% in the previous quarter.
The deceleration comes despite aggressive measures taken this year to spur growth after years of stagnation.
Market gains essentially stalled in May, and skepticism is growing that Abe can deliver the tough decisions that would set Japan’s economy on a more sustainable growth path; for example, by letting companies fire workers more freely to open up a new dynamism in the sclerotic labor market.
The Gross Domestic Product for Japan expanded by only 1.1 from the previous year, a slower rate than the original 1.9 estimate.
In January of 2014 the finance ministry of Thailand’s lowered its 2014 economic forecast for the second time in a month. The latest forecast is now down to 3.1% from the original 5.1%.
Indonesia reported the fifth consecutive quarter of slower growth and the weakest reading in 15 quarters in the third quarter, raising fears that the once stellar-performing Southeast Asian economy could be hitting a wall.
Indonesia’s growth is set to slow in 2014 and risks to economic growth are expanding. Growth slowed to 5.6% in the third quarter. Forecasts for 2014 predict an even slower rate at 5.3%.
Malaysia’s GDP growth slowed in the first half of 2013 largely on account of weak external demand. The World Bank said the impact of further fiscal consolidation and possibly tighter credit conditions on domestic demand would weigh on the growth outlook in 2014 and 2015.
The growth rate in Malaysia is forecast to grow to 5.5% in 2014 as compared to 4.5% in 2013. Although it is better than originally expected growth is overall slowing from the boom years before the 2008 crisis.
The South Korean economy is facing problems of the so-called slow, old and sandwich (SOS) which refers to its slow growth, due in part to the aging of society and its labor force, amid growing competition from its neighboring countries.
The growth forecast for 2014 in South Korea has been lowered from 4.0% to 3.9%.
GDP growth constrained by weak exports preliminary figures for Taiwan GDP showed a flat level of growth on a sequential basis. The headline GDP number had an increase of 1.6 percent year-over-year in the third quarter, which fell short of expectations
The economy of Taiwan may grow 2.59 percent in 2014, the statistics bureau said last month, lower than the 3.37 percent pace forecast in August of 2013.