Press Release

The East Asian economy (excluding Japan) is projected to grow by 7.4% in 2006, according to a report released today by the Institute of Developing Economies, Japan External Trade Organization (IDE-JETRO). The report, entitled "2007 Economic Outlook for East Asia", provides growth estimates for 2006 as well as prospective 2007 growth figures for China, the four Asian NIEs (the Hong Kong Special Administrative Region (SAR), the Republic of Korea (ROK), Singapore and Taiwan) and the ASEAN 5 (Indonesia, Malaysia, the Philippines, Thailand and Vietnam).

The forecast for 2007 is based on the following assumptions: the advanced economies will grow at slightly slower paces (the US at between 2.0-2.5%, Japan at around 2%, and the EU at between 2.0-2.5%); the yen-US dollar exchange rate is expected to remain at the level seen in the later half of 2006; and crude oil prices will decrease by 7 to 8% from their 2006 level.

Forecasted Growth in 2007

According to the report, the East Asian economy as a whole will post solid growth of 7.4% in 2007, down 0.5 points from last year's figure, underscoring concerns over slower economic growth in China and the four Asian NIEs. The combined inflation rate is estimated to decline 0.4 points year-on-year to 3.5%.

The Chinese economy, despite projected slowdowns in domestic and external demand, is forecast to grow at a (still high) 9.6% rate in 2007, down 0.9 points from this year's projected growth figure.

The combined growth rate for the four Asian NIEs in 2007 is estimated at 4.7%, down 0.5 points from the projected 2006 figure, owing to a slowdown in external demand. ROK and Taiwan are expected to grow at lower rates in 2007, 4.4% and 4.1% respectively, due to weaker demand resulting from a slowing Chinese economy. Estimated growth rates for Hong Kong SAR and Singapore in 2007 are also lower (compared to this year's projected figures), at 5.9% and 6.1% respectively.

The report predicts 5.6% growth for the combined economies of the ASEAN 5 in 2007. Individually, Indonesia and Thailand are forecast to post accelerated growth rates of 5.8% and 4.9% respectively, on the back of strong domestic demand. Malaysia will grow at 5.2%, reflecting slower domestic and external demand, while the Philippines will expand 5.3%, also reflecting a slowdown in (external) demand. The Vietnamese economy is forecast to grow at an accelerated pace of 8.4% in the coming year.

Estimated Growth in 2006

According to the IDE-JETRO report, the East Asian economy as a whole is predicted to post growth of 7.9% in 2006, up 0.4 points over last year's figure, driven by accelerated growth in China and the four Asian NIEs. The combined inflation rate is estimated to increase 0.5 points year-on-year to 3.9%.

Driven by growth in investment, the Chinese economy is projected to grow by 10.5% in 2006, 0.3-points higher than the figure achieved in 2005.

The combined growth rate for the four Asian NIEs in 2006 is estimated at 5.2%, a 0.6-point increase over last year's figure. Individually, ROK and Hong Kong SAR are estimated to grow at 4.8% and 6.8% respectively, driven by growth in domestic demand (and despite an expected decrease in net external demand). The Taiwanese economy is predicted to grow at 4.4% in 2006, with solid exports offsetting weaker domestic demand.

The combined growth rate for the ASEAN 5 in 2006 is estimated at 5.4%, roughly the same as last year's figure. Indonesia, despite stagnant investment growth, is estimated to grow by 5.2%. Buoyant external demand compensated for slower domestic demand in Thailand, where 4.8% growth is expected. Malaysia is estimated to grow at 5.7%, due to expanding investment, while Vietnam is predicted to grow at 8.2%, led mainly by the country's industrial and services sectors. The Philippines, despite weak investment, is estimated to grow by 5.5%, on the back of thriving external demand and consumption.

2007 Economic Outlook for East Asia (Full Text)(218KB)

ABSTRACT(22KB)

OVERVIEW(62KB)
I. The East Asian Economies in 2006

• The Advanced Economies in 2006
• Expected Performance of IT-related Industries
• Assumption about the Price of Crude Oil
• With the U.S. Dollar Remaining Relatively Strong, the Yen's Exchange Rate Is Expected to Stay within the Lower 116 Yen Range
• The United States' Imports from East Asia
• Japan's Imports from East Asia
• Developments in East Asia's U.S. Dollar-Denominated Exports
• Real-term Exports of East Asia
• Led by Thriving Investment, China's Economy Is Predicted to Grow by 10.5%, Registering Double-Digit Growth for the Fourth Consecutive Year
• Under the Effect of an Upturn in Consumption and Expanding Investment in Machinery and Equipment, the South Korean Economy Is Predicted to Grow by 4.8%
• Despite Stagnant Domestic Demand, Taiwan's Economy Is Predicted to Grow by a Faster Rate than in 2005, Sustained by Thriving Exports
• Hong Kong's Economy Is Predicted to Slow in 2006, Though Strengthened by Expanding Domestic Demand
• Singapore's Economy in 2006 Is Predicted to Bounce Back to an Above-8% Growth Rate, Boosted by Robust Expansions of Both Domestic and External Demand
• The Asian NIEs as a Whole Are Predicted to Grow by 5.2% in 2006, a Rate 0.6 Percentage Point Higher Than in 2005
• Indonesia's Economy in 2006 Is Predicted to Slow under the Effect of Stagnant Investment
• The Thai Economy Is Predicted to Grow by a Higher Rate, Sustained by a Strong Export Expansion Making up for Slowing Domestic Demand Growth
• The Malaysian Economy Is Predicted to Grow by an Accelerating Rate, Boosted by a Recovery in Investment
• The Philippine Economy Is Predicted to Grow at an Accelerating Rate, As the Adverse Effect of Stagnant Investment Is Offset by Expanding Consumption and External Demand
• The Vietnamese Economy Is Predicted to Continue Its High Growth, Led by Expansions in the Industrial and Service Sectors
• In 2006, the ASEAN 5 Are Predicted to Grow by a Combined Growth Rate of 5.4%, the Same Rate as in 2005
• Boosted by the Increasing Growth in the Chinese Economy and the Asian NIEs, the East Asian Economy as a Whole Is Predicted to Grow by 7.9%, a Rate Higher than in 2005

II. Economic Forecasts for East Asia in 2007

• Assumptions Regarding the Advanced Economies in 2007
• For 2007 as a Whole, the Yen's Exchange Rate Will Remain Comparable to That in the Latter Half of 2006
• The Price of Crude Oil Will Decrease by 7 to 8% from the 2006 Level
• The Chinese Economy Will Grow by 9.6%, Slowing by 0.9 Percentage Point from the 2006 Rate
• The Economy of South Korea Will Grow by a Slightly Lower Rate Than in 2006, Affected by Slowing Growth in Machinery and Equipment Investment and External Demand
• Taiwan Will Post a Subdued Growth Rate of 4.1%, Under the Effect of Sluggish Growth of External Demand, Which Will Partly Cancel out the Effect of a Recovery in Domestic Demand
• Reflecting the Slowing Growth in China and the Advanced Economies, the Hong Kong Economy Will Grow by a Lower Rate than in 2006
• Singapore's Economy Will Grow by 6.1%, Slowing from the High Rate Registered in 2006
• Growth in the Asian NIEs as a Whole Will Decelerate in 2007
• The Indonesian Economy Will See Its Domestic Demand Rebound and Inflation Slow to a Single-Digit Rate
• The Thai Economy Will Grow at an Accelerating Rate, Led by Expanding Investment
• Malaysia's Economy Will Secure Stable Growth, in Spite of Slowing Growth of Both Domestic and External Demand
• The Philippine Economy Will Attain a Stable Growth Rate, Underpinned by an Upturn in Investment, Despite Slowing Export Growth
• The Vietnamese Economy's Growth Will Accelerate, Continuing to Register an Above-8% Growth Rate
• In 2007, the ASEAN 5 Will Grow by an Accelerated Rate of 5.6%, While Enjoying Slowed Inflation
• Despite Slowing Growths of the Chinese Economy and the Asian NIEs, the East Asian Economy as a Whole Will Register a Robust 7.4% Growth Rate in 2007

TABLES AND FIGURES(84KB)

• Table 1. Forecasts for GDP Growth Rates and Inflation Rates in East Asia, 2006 and 2007
• Table 2. Growth Rates of U.S. Dollar-Denominated Imports of the United States from East Asia
• Table 3. Growth Rates of U.S. Dollar-Denominated Imports of Japan from East Asia
• Table 4. Growth of U.S. Dollar-Denominated Exports of Goods from East Asia
• Table 5. Actual and Assumed Exchange Rates of Japanese and East Asian Currencies to the U.S. Dollar
• Table 6. Growth Rate of Real Term Exports of Goods and Services Figure 1. Forecasts for GDP Growth Rates in East Asia
• Figure 2. U.S. Dollar-Denominated Imports of the United States from East Asia
• Figure 3. U.S. Dollar-Denominated Imports of Japan from East Asia

COUNTRIES AND REGIONS(87KB)

• China
  The Economy in 2006: Double-digit Growth Rate for the Fourth Consecutive Year, Led by Brisk Investment
  Forecast for the Economy in 2007: 9.6% Growth Under the Effect of the Continuing Restraints on Investment and Slowing Growth of Exports
  
• South Korea
  The Economy in 2006: Accelerated Growth at 4.8%, Led Mainly by an Upturn in Private Consumption and Equipment Investment
  Forecast for the Economy in 2007: Slower Growth at 4.4%, Affected by a Slowing Expansion of External Demand and Equipment Investment
  
• Taiwan
  The Economy in 2006: 4.4% Growth, Sustained by Solid Exports
  Forecast for the Economy in 2007: 4.1% Growth Under the Influence of Slowing External Demand, Despite a Recovery in Domestic Demand
  
• Hong Kong
  The Economy in 2006: 6.8% Growth, Sustained by Expanding Domestic Demand, Despite Decelerating Growth of External Demand
  Forecast for the Economy in 2007: 5.9% Growth, Reflecting Moderate Slowdowns in the Growth of Domestic Demand and External Demand
  
• Singapore
  The Economy in 2006: High Growth of 8.1%, Led by Thriving Exports and a Recovery of Domestic Demand
  Forecast for the Economy in 2007: Growth Will Decelerate but still Remain Solid at 6.1%
  
• Indonesia
  The Economy in 2006: Deceleration to 5.2% Growth, Due to Slackening Investment Growth
  Forecast for the Economy in 2007: 5.8% Growth, Stimulated by an Upswing in Domestic Demand
  
• Thailand
  The Economy in 2006: 4.8% Growth, Led by Sound Exports
  Forecast for the Economy in 2007: 4.9% Growth, under the Effect of Accelerating Investment
  
• Malaysia
  The Economy in 2006: 5.7% Growth, Driven by Investments
  Forecast for the Economy in 2007: Stable Growth of 5.2%, Despite Slowing Growth of Both Domestic and External Demand
  
• The Philippines
  The Economy in 2006: 5.5% Growth, Based on Expanding Exports and Strong Private Consumption
  Forecast for the Economy in 2007: 5.3% Growth, Underpinned by an Upturn in Investment Despite Slowing Export Growth
  
• Vietnam
  The Economy in 2006: A High Growth Rate of 8.2%, Led by the Industrial and Service Sectors
  Forecast for the Economy in 2007: Growth Will Accelerate Further to a High Rate of 8.4%
  
• Appendix: Summary Tables of Share and Growth Rates of GDP Expenditures
  

Overview and Supervision
Jinichi Uemura

Countries and Regions
Jinichi Uemura China/South Korea/Malaysia
Chinami Yamaji Hong Kong/Singapore/Vietnam
Kazushi Takahashi Indonesia/The Philippines
Etsuyo Michida Taiwan
Yusuke Okamoto Thailand

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Jinichi Uemura TEL:+81-43-299-9673
Chinami Yamaji TEL:+81-43-299-9690
※Please fax to :+81-43-299-9763(same for all authors)

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