Economy Situation in Asia Affects the Growth of International Business

Topics: Unemployment, Macroeconomics, Inflation Pages: 2 (646 words) Published: February 2, 2013
Economy Situation In Asia Affects The Growth Of International Business Q. Search the internet about economy situation in Asia recently and discuss how this situation affects the growth of International Business in the region. Weak demand in developed countries and a slowing Chinese economy are likely to weigh on economic growth in East Asia in the outlook period. According United Nations New York (2012) after decelerating from 9.2 per cent in 2010 to 7.1 per cent in 2011, average regional growth is expected to slow further to 6.5 per cent in 2012. In 2013, the pace of growth is projected to pick up slightly as global demand recovers, with regional GDP forecast to expand by 6.9 per cent. The growth slowdown in East Asia reflects weaker import demand in developed countries, increased global uncertainty and the lagged effects of credit tightening in parts of the region, most importantly in China. While the risk of a hard landing of China’s economy in the outlook period is low, growth is forecast to slow from 9.2 per cent in 2011 to 8.3 per cent in 2012. Across the region, weaker growth of exports and investment is expected to be partly offset by strong household and government consumption as fiscal policy becomes slightly more expansionary. Household consumption will be supported by persistently low real interest rates and rising real wages. The region’s labour markets are expected to remain fairly robust despite slower employment growth, particularly in the manufacturing sector. A significant decline in consumer price inflation will also contribute positively to real wage growth in 2012. The slowdown in inflation stems primarily from an easing of food and commodity prices, which can be attributed to improved supply conditions in the region and a weakening of the global economic environment. While several central banks, including the People’s Bank of China, loosened monetary conditions in response to lower inflationary pressures and slower domestic growth, no...
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