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The outlook for several key leading economies


Outlook for Singapore: the positives

  • Resident population growth is still pegged at 1.2% p.a.

  • Top corporate income tax rate of 17% keeps drawing in FDI.

  • Zero tax on startups’ first $100,000 of income for the first three consecutive years of business keeps drawing in Tech, Fintech and other startups.

  • Strong, positive current account balance, will offset some of the downward pressure on SGD stemming from higher US interest rates.

Outlook for Singapore: the negatives

  • GDP growth remains anaemic.

  • Exports of non-electronic products shrank 2.5% last year owing to weak demand and price competition from China, South Korea and Taiwan.

  • Total exports fell by at least 7% in 2016, bringing exports down to a yearly total of USD 350Bn

  • In the property sector, supply is expected to exceed demand into late 2018, possibly 2019.

  • NPLs will stay at a high of1.6t o 1.7% among major banks.



Present Outlook for Malaysia

  • Of all ASEAN countries, Malaysia is the one with the highest NPL ratio.

  • Most of these NPLs are politically connected and do not represent the true situation of Malaysian SMEs, which are typically well run.

  • The tourism sector is doing extremely well, with hotel capacity utilization above 91% for the first time in 15 years

  • In order to comply with Basel III, Malaysian banks will have to curb lending significantly in the coming years.

  • This opens up an immense opportunity for alternative financing platforms.



Present Outlook for Indonesia

  • While economic and financial data for Indonesia has been a mixed bag in the past eighteen months, our survey points overall to steady momentum in the fiscal year 2017. 

  • GDP growth is likely to have reached 5.0% in FY 2016.

  • Economic data points to steady private consumption but negative investment growth (CAPEX) owing to the oil and gas crisis. 

  • Retail sales accelerated in Q4 2016, but the manufacturing PMI ended the year on a downbeat note. 

  • Exports are likely to continue to improve, after the government announced a shift in mining policy on 12 January. The government eased a ban on unprocessed ore shipments and changed rules on exports of semi-processed metals.

Present Outlook for Thailand

  • Thailand saw anaemic GDP growth (in Baht) and a steady decline for the past 3 years (in USD).

  • CAPEX is likely to stay subdued, and manufacturing virtually stagnating for the second consecutive year.

  • The one economic sector showing strong gains is INFRASTRUCTURE for which Thailand may be able to secure relatively cheap loans from the

  • International Finance Corporation (among others).

Present Outlook for China

  • The IMF sees the world’s second largest economy growing 6.4% in FY 2018.

  • Consumption is holding up; factories have pulled out of a four-year streak of deflation.

  • Much of China’s rebound has been attributed to a deluge of cheap credit unleashed by state-run banks at the government’s behest.

  • But continued reliance on policy stimulus measures, with the rapid expansion of credit and slow progress in addressing corporate debt, especially in hardening the budget constraints of state-owned enterprises, raises the risk of a sharper slowdown or a disruptive adjustment.

  • China’s total debt grew 465% over the past decade, total debt rose to 247% of the gross domestic product in FY15, from 160% in 2005, with corporate debt jumping to 165% of GDP.

  • These risks can be exacerbated by capital outflow pressures, especially in a more unsettled external environment.

Present Outlook for Philippines

  • After 2016’s impressive GDP readings, the Philippines are likely to remain Asia’s fastest growing economy in FY 2017.

  • The trade deficit widened in November. Exports dropped significantly in that month, mainly on the back of weaker demand for manufactured products, while remittances surged, likely fueling private consumption and, therefore, imports. Moreover, the typhoon that hit the Philippines in December caused extensive damage, cutting off power to millions and negatively affecting agricultural production. 

  • In January 2017 the government approved a pension increase for two million retirees and raised social contributions from active members to finance the additional spending.

  • Consumer spending and infrastructure spending will be the brightest spots in FY 2017.



The opinions expressed on this website are based on independent market research. No liability is assumed for the accuracy or reliability of any information contained herein.

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