Thailand
Growth in Asian economies slowed sharply in second quarter, with focus on Japan, S. Korea
The economic focus is on Japan and South Korea this week, with data likely to show the Korean economy inched up in the April-June quarter. Gross Domestic Product (GDP) figures are out today and Moody’s Analytics forecasts 0.8 percent growth, compared with the first quarter of 2021. GDP grew at a quarterly 1.7 percent pace in the first three months of this year.
Slowing growth probably prompted factories to ease the pace of production, although industrial output is still forecast to have grown by 12 percent in June, from the same month last year. In May output was up 13.7 percent. June figures are out on Friday.
“While the economy has benefited from a consistently strong export performance, the domestic Covid-19 situation remained worrisome, necessitating extended social distancing rules, which moderated the gains from [strong non-residential] spending growth,” said Shahana Mukherjee, an economist at Moody’s Analytics in Sydney.
“Notwithstanding this constraint, some improvement in the pace of employment, together with continued strength in trade, is expected to have lifted demand,” she said.
Japan’s factories are also cooling the pace of activity as the Coronavirus pandemic shows signs of spiking back up again. Figures out on Friday are forecast to show a rise of 15.5 percent last month, compared with June 2020. Industrial production rose 21.1 percent in May, year-on-year.
One reason for the slowdown is a big drop off in Japanese retail sales. Moody’s forecasts a rise of 0.5 percent in June from the same month last year. Sales spiked 8.2 percent the previous month. Persistent unemployment is also putting the lid on spending.
“Japan’s unemployment rate is likely to have remained unchanged at 3 percent in June, as rising raw material costs on the production side, combined with the relatively subdued confidence due to the pandemic-related uncertainty, are expected to have limited the scope for employment creation,” said Mukherjee.
Slowing spending in Japan could spell trouble for Cambodian companies. It was the Kingdom’s fourth-biggest export destination last year, at 6 percent of total overseas shipments. Exports to Japan surged nearly 35 percent in the first four months of the year, compared with the same period in 2020.
Taiwan’s economic growth also appears to be tapering off. Friday figures are forecast to show a quarterly rise in GDP of just 0.8 percent in the second quarter. The economy expanded 3.1 percent in the January-March quarter compared with the final three months of 2020.
Source: https://www.khmertimeskh.com/50902161/growth-in-asian-economies-slowed-sharply-in-second-quarter-with-focus-on-japan-s-korea/