East Asia Updates: Special 2018 Annual Edition

Abstract

The year 2017 was a good one for most East Asian countries. As shown in Figure 1, almost all countries recorded higher year-to-date (ytd, Q1-Q3 2017) gross domestic product (GDP) growth compared to the average achieved in the past 3 years. Thailand, Singapore, Malaysia, and Japan recorded the largest pickup compared to average growth achieved in the past 3 years. The Philippines managed to grow even more strongly than its already high 3-year average, as did the Republic of Korea and Indonesia though their pickup was less strong than that of other countries in the region. India’s GDP growth, by contrast, was considerably lower than over the past 3 years, due in part to the unexpected demonetisation in November 2016. China recorded a small correction to its recent years’ average, as discussed below, and 2017 is expected to be the first year China’s GDP growth accelerates, after a continuous slowdown since 2011. High-frequency indicators such as the manufacturing Purchasing Managers’ Index (PMI) for Q4 2017 show the expansion continued in the last quarter of 2017. As shown in Figure 2, the manufacturing PMI in most countries continued to point to expansion in October and November, with stronger expansion recorded in November than in October. Overall 2017 GDP growth for the region is expected to be around its current year-to-date growth rate, which is higher than the 2016 rate. The bedrock of this trend, arguably, is the improving global economic conditions, an important factor for economies deeply involved in global trade such as those of the East Asian region.