Real GDP growth in Asia is broad-based and strong, indicated by real activity indicators. The better performance of exports against industrial production has resulted in a stable decline inventory stocks, particularly in North Asian nations such as Taiwan, Korea and Japan. The recent fiscal and credit stimulus in China have aided in reducing inventories, while manufacturers seem more upbeat, reversing their earlier cautious stance of maintaining low inventories, noted Barclays in a research report.
Increasing prices are also expected to give additional incentives for manufacturers to restock. Thus, inventory restocking is expected to have a crucial role in driving economic growth in the first half of 2017 at least. Given the ongoing momentum in these nations, Japan’s real GDP growth is likely to come in stronger at 1.7 percent in the first quarter, according to Barclays. Significant risks on the upside to this forecast remains, given the solid surprise to Japan’s export growth with a outturn of 12 percent year-on-year in March, as compared with the consensus expectations of a growth of 6.2 percent.
Meanwhile, China’s economic growth expanded 6.9 percent in the first quarter of 2017, while the industrial output rose to a 27-month high of 7.6 percent. The economic growth of China is thus likely to grow 6.7 percent this year, added Barclays. The rebound of China’s economic growth has also significantly boosted activity in other emerging nations of Asia. In all, Asia is expected to see robust growth in the near term, according to Barclays.
The material has been provided by InstaForex Company – www.instaforex.com
April 22, 2017 at 03:28AM