Deloitte's Asia Pacific Economic Outlook - February 2009

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. February 10, 2009

FEBRUARY 10, 2009 - The February 2009 edition of the Asia Pacific economic outlook highlights the major points from the World Bank's 'Economic Report on the East Asia and Pacific Region' and gives a near-term economic outlook for China, India, Malaysia, Singapore, and Thailand.

China - The economy slowed sharply in the fourth quarter of 2008 and is expected to slow even further in 2009. The government could likely enact a second stimulus plan to further bolster the economy.

India - A high domestic consumption ratio couldn't shield India from the global slowdown. The economy is showing signs that the near-term is unlikely to be pleasant. The central bank will likely cut rates when the next tranche of bad macroeconomic numbers come in.

Malaysia - A fall in the price of commodities and a contraction in global trade has hit Malaysia very hard. The contraction in exports has hit the industrial sector leading worsening an already bad situation. The central bank will likely reduce rates to counter the slowdown. The government's stimulus plan may prove to be too small to counter the headwind.

Singapore - GDP fell by 3.7 percent in the fourth quarter 2008, the largest fall in seven years. The government is expecting the economy to contract by 5 percent in 2009. To counter this expected slowdown, the government is spending $13.7 billion but a recent IMF paper suggests that fiscal policy tends to have a limited impact in Singapore.

Thailand - Falling exports, lower-than-expected tourist numbers and political problems have led to a slowdown and the economy is expected to continue slowing through 2009. Expect the central bank to cut rates and the government to introduce more fiscal measures.