Asia nearing end of slowdown as China recovers
East Asian countries are poised to report gross domestic product data that may mark the bottom of the region's slowdown, as signs of a recovery in China and the U.S. herald a revival in demand for exports.
In Thailand Gross domestic product probably rose 3 percent last quarter from a year earlier, slowing from a 4.2 percent gain in the previous three months.
Hong Kong's GDP probably rose last quarter after declining the previous three months, according to a Bloomberg survey before a report tomorrow. Expansion in Malaysia and Thailand may have eased while Singapore's contraction was probably worse than initially estimated, separate surveys showed. Regional growth will probably recover this quarter, Moody's Analytics, Citigroup Inc., and Australia & New Zealand Banking Group predict.
"Across Asia, the business cycle likely reached its trough, with many economies reporting the worst growth in the third quarter," said Glenn Levine, an economist at Moody's Analytics in Sydney. "Stimulus measures are starting to boost Chinese demand and the recovery slowly coming into fruition in the US means 2013 will be a better year for most of the region."
Most Asian currencies, led by the South Korean won and Taiwanese dollar, have risen in the past three months as stronger housing demand in the U.S. and accelerating factory output in China signal the two largest economies may lift the world from its mid-year slowdown. While interest-rate cuts in Thailand and the Philippines in October underscored the immediate risks to growth, pressure to loosen monetary policy further has abated elsewhere, with Singapore and Indonesia refraining from stimulus in their most recent decisions.
"The region is unlikely to go for further easing at this point in time," said Aninda Mitra, a Singapore-based economist at ANZ. "Countries are starting to face asset price and inflation pressures and they'll have to be careful about that."
China's factory output and retail sales exceeded forecasts in October and exports climbed the most since May. U.S. consumer spending, the biggest part of the economy, and an improving housing market are leading the expansion amid rising confidence, better employment prospects and healthier household finances.
Hong Kong's gross domestic product probably expanded 0.5 percent in the three months through September from the previous quarter, according to the median of 11 economists in a survey. Malaysia's year-onyear economic growth eased to 4.8 percent in the third quarter from 5.4 percent, according to survey before a report due tomorrow.
Malaysian Prime Minister Najib Razak is increasing spending ahead of a general election that must be held by early 2013. Najib announced lower income taxes and more handouts for the poor in his 2013 budget unveiled in September, as the government projected Southeast Asia's third-largest economy will expand as much as 5 percent in 2012.
In Thailand, Prime Minister Yingluck Shinawatra has also boosted spending and raised salaries as the nation recovers from the worst floods in almost 70 years. Gross domestic product probably rose 3 percent last quarter from a year earlier, slowing from a 4.2 percent gain in the previous three months, according to a Bloomberg survey before a report due Nov 19.
Meanwhile, Singapore's economy probably shrank 2.9 percent in the third quarter from the previous three months, compared with a preliminary estimate of a 1.5 percent contraction, another survey showed.