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Economic Research: Asia-Pacific Forecasts Stabilize, Risks Now Balanced


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Economic Research: Asia-Pacific Forecasts Stabilize, Risks Now Balanced

Our economic forecasts for Asia-Pacific are stabilizing. Uncertainty remains unusually high but little in the past three months has led us to make large revisions to our views. S&P Global Ratings expects Asia-Pacific GDP to shrink about 2% in 2020 and grow by 6.8% in 2021, close to our previous forecasts at the end of the third quarter.

In uncertain times, we need to pay much attention to the risks around forecasts. Our forecasts tell the story of what we think will most likely happen (for the statisticians, the mode of our distribution). Growth can be better or worse than we think and, for the first time in 2020, we see the probability of both as being roughly the same.

Most important, the probability has risen of a safe and effective vaccine rolling out earlier than our baseline assumption of the second half of 2021. All the logistical challenges remain. Still, an early rollout would mean both a faster normalization with less permanent damage to labor markets and balance sheets than we currently assume in our forecasts.

There are other positive developments. Jobs have stabilized and some labor markets have shown unexpected vigor. A new U.S. administration lowers the risk of an acute escalation in economic conflict with China. The Regional Comprehensive Economic Partnership (RCEP) inks the first broad Asia-Pacific free-trade agreement in history. These developments either lower the probability of very bad outcomes or increase the probability of faster growth in the next 12 months and beyond. After a difficult year, this is new.

What's Changed Since The Third Quarter Of 2020, And How It Changed Our Forecasts

Probability of an early COVID-19 vaccine rises; we retain our late 2021 rollout assumption and see upside risks for growth in 2021.  

  • Effect on growth forecast: none yet
  • Effect on balance of risks: increases upside risk in the next 12 months.

An early vaccine rollout would bring forward the recovery next year. Even if a recovery came one quarter earlier, it would have a large effect on growth for the full year. It would speed up domestic normalization by reopening affected sectors and reducing voluntary social distancing.

Tourism and travel would return faster, albeit with a lag. Still, trials data are preliminary and logistical challenges remain, so we maintain our assumption of wide distribution in the second half of 2021, for now.

Labor markets have proven resilient across Asia-Pacific--this reduces the risk of exceptionally large permanent losses in output.  

  • Effect on growth forecast: some upward revisions
  • Effect on balance of risks: increases upside over the next 12-24 months

Fewer jobs were lost than expected, helped by timely policy interventions, including wage subsidies. Jobs are also rebounding faster than expected in some cases, due in part to the flexibility of part-time and temporary workers, who bore the brunt of job losses. This is especially true in Australia. Labor markets will take time to return to normal, but the quicker rebound is good news for the pace of recovery. And, by keeping workers engaged in the economy, this is good news for the level of output in the "new normal."

The threat of premature policy tightening, in many economies, has receded. 

  • Effect on growth view: none yet
  • Effect on balance of risks: reduces downside over the next 12-24 months

Several governments have announced budgets that provide support to the economy through much of 2021. Australia and Malaysia are two recent examples where more support has been extended to the end of the current fiscal year or the next. Other economies are signaling more support to come, including Japan. We anticipate a tightening in China next year, but this is already built into our forecast.

The RCEP adds upside risk to growth but with little immediate effect.  

  • Effect on growth forecast: none yet
  • Effect on balance of risks: increases upside over the next five to 10 years

Over time, by reducing tariffs and harmonizing rules of origin, RCEP increases the marginal return on capital in tradable goods. This should increase investment, boost activity, raise real wages, and deliver welfare gains to consumers via more choice and lower prices. However, this will happen only gradually as tariff cuts are phased in over two decades. We do not expect the effect on growth next year to be noticeable.

China confirmed its goal of achieving technology independence at the Fifth Plenum; we had already assumed a turn toward digital self-reliance in our forecasts.  

  • Effect on growth forecast: none
  • Effect on balance of risks: increases downside over the next five to 10 years

Weaning the economy off foreign technology would reduce openness across the fast-growing digital economy. Less openness would dampen productivity growth by reducing competition and limiting the free flow of ideas and products from overseas. Opening other areas of the economy will continue. We already factor in a moderate turn toward self-reliance in our 4.6% average growth rate for the decade through 2030.

COVID-19 surged in Europe and the U.S.--this has only a marginal effect on Asia-Pacific economies via the trade channel.  

  • Effect on growth forecast: none
  • Effect on balance of risks: marginally on the downside in the next six to 12 months

We expect somewhat weaker activity in late 2020 and early 2021 as the economic hit of the latest COVID surge is weaker than before. This will dampen but not derail Asia-Pacific's export recovery, which has proven its resilience to COVID-related spending declines.

A new U.S. administration lowers the probability of an escalating trade war--we had assumed stalemate, so this does not affect our growth forecasts through 2021.  

  • Effect on growth forecast: none yet
  • Effect on balance of risks: reduces acute downside in the next six to 12 months

U.S. tariffs on China will remain in place for a while yet, but the probability of further hikes is low. U.S. economic engagement with Asia-Pacific is likely to become more multilateral and predictable but bilateral support in the U.S. for decoupling in some sectors, especially technology, will remain strong. This remains more of a structural challenge across Asia-Pacific.

What We Assume In Our New Forecasts

Output in some sectors will not arrive at the new normal until a vaccine is rolled out.   Even where COVID-19 is contained, lingering restrictions, voluntary social distancing, and curtailed international travel will suppress demand in some sectors of the economy through 2021. The effect, as we have learned this year, is asymmetric across sectors with some buoyant while others are depressed--notably tourism, travel, and services oriented toward in-office working.

Trade should stay supportive for 2021.   Exports may soften as demand in Europe and the U.S. is hit by renewed infections but the prospects for export growth remain intact. The mix of exports will be important for which economies perform best. Electronics and consumer goods will favor China, Singapore, and Taiwan, while capital goods, which may recover only later next year, benefit Japan and Korea.

External financial conditions will support growth; central banks will intervene to prevent rapid currency appreciation.   A global recovery and forward guidance from G-7 central banks keeping rate expectations low will support capital flows to Asia-Pacific, especially emerging markets. Exchange rates should remain broadly stable versus the U.S. dollar. Asia-Pacific exchange rates do not appear overvalued but rapid appreciation versus the dollar could see Asian central banks--especially among current-account surplus economies--intervening and accumulating reserves.

Inflation will pick up but remain low, keeping a lid on corporate revenues in some sectors.   Much of this effect will come from suppressed demand in the jobs-rich services sector. With many people still looking for work, wage growth will be weak, and consumption will recover only gradually. With little demand pull or cost push pressure, core inflationary strains (excluding food and energy) will remain subdued.

Fiscal policymakers will start unwinding stimulus in 2021.   Governments across the region will tighten their belts by allowing temporary supports to expire and saving a large share of the incremental revenue flowing in as economies recover. This will slow momentum but not derail recoveries, which will be driven by the powerful effects of normalization.

Central banks will keep policies extraordinarily loose.   To offset fiscal tightening and guard against deflation and meet their own inflation targets, central banks will keep policy rates close to historical lows. They will use their balance sheets to provide additional support, especially where transmission from the policy rate to the real economy is weak. New lending facilities, such as term lending, will likely expand. This has proven effective in supporting credit in 2020.

Australia--revise up 2020 growth to negative 3.4% on rapid consumption rebound.  We revised 2020 growth on a faster domestic demand rebound, led by consumption, but slightly reduce our 2021 growth forecast to 4.0% from 4.2%. Policies protecting jobs, supporting household incomes, and easing access to retirement savings have been effective.

Employment fell by 7% at the trough but many of these jobs have already been regained. Unemployment will remain elevated as people re-enter the workforce but jobs growth, personal income-tax cuts, and a falling household saving rate should support consumption growth of over 4% next year. The housing market has steadied, and we believe prices have bottomed.

Private investment should stay weak, including for dwellings, but public infrastructure investment will provide a partial offset. Overall investment is likely to barely grow next year. External demand should continue its recovery as demand from China outweighs the effect of weaker services exports, including tourism and education.

We project inflation to remain below the Reserve Bank of Australia's (RBA) target range of 2%-3%, at least through 2022. While jobs are returning, more people are looking for work and a rising share of part-time jobs will offset lower migration flows to keep underemployment elevated and wage growth weak, reducing cost push pressures.

New budgets at the national and state level reduce the risk of an abrupt fiscal tightening for now, although this remains a risk for late 2021 and 2022. The RBA has scaled up its quantitative easing program and retains an interest rate target of 0.10% for the overnight rate and the three-year government bond yield. We expect a steady RBA policy, with risks tilted toward more easing, especially via term lending, if fiscal conditions tighten more than expected through 2022.

China--we keep our 2020 growth forecast at 2.1% and 7.0% for 2021.  Our 2021 estimate is slightly higher than the previous 6.9%. Our forecast assumes a substantial rotation in demand from infrastructure investment, property, and exports, but more private consumption. The first-half income shock and subdued service sector hiring has led to a gradual recovery in household spending. Recent data point to an improvement and we expect consumers to run down savings and bring spending back to normal levels, implying real consumption growth of about 9% in 2021.

Investment growth should slow as financial conditions tighten, driven by a more retrained fiscal and macroprudential policy stance. This should hit infrastructure and real estate (see "China's Tight Financial Conditions Start To Bite," published on RatingsDirect on Nov. 19, 2020). Export growth will continue. The pace of change in growth rates will slow as the initial burst of work-from-home demand for electronics subsides.

Inflation may diverge as producer prices remain under pressure and consumer prices edge higher. Producer price deflation will likely stay entrenched as demand for heavy industry cools. Consumer prices should rise alongside a consumer revival and, at some point, a tighter labor market driven by hiring in the services sector. This should offset the normalization of food prices and keep headline inflation at about 2%.

Policies have already tightened, in effective terms, and we expect this to continue through 2021. We anticipate the on-balance sheet general government deficit to start moving closer back to the 3% level, while off-balance-sheet borrowing by local government financing vehicles will shrink.

Macroprudential and property sector policies, including restrictions on leverage for property developers, will continue. We expect monetary policy, notably de facto short-term policy rates, to remain steady at about 2.2% through 2021.

India--retain negative 9% growth forecast for fiscal year 2020-2021 and 10% for 2021-2022.  We retain our growth forecast of negative 9% in fiscal 2020-2021 and 10% in fiscal 2021-2022. While there are now upside risks to growth due to a faster recovery in population mobility and household spending, the pandemic is not fully under control. We will wait for more signs that infections have stabilized or fallen, together with high-frequency activity data for the fiscal year third quarter, before changing our forecasts.

As with other economies, the industrial sector is leading and output is now above levels from a year ago, helped by rising demand for consumer goods. Investment recovered faster than consumption in the fiscal second quarter, partly due to resumption of stalled projects. The private sector drove the recovery as spending resumed and households and firms moved more toward normalized activity.

Inflation should ease from recent highs, albeit gradually. We project that headline consumer price inflation just above the mid-point of the Reserve Bank of India's (RBI) forecast a range of 2% to 6% through 2021. One-off factors should ease, including food-supply disruptions and supply constraints related to earlier lockdowns. But the pass-through to core inflation, currently near 6%, suggests that inflation persistence remains a challenge.

We do not expect much fiscal easing in our projections. Past action has targeted low-income households, with substantial welfare effects, but a broader fiscal effort has been lacking. We do not see this changing. At the same time, the RBI will be constrained from cutting rates and we anticipate rates will start normalizing upward from 2021 onwards.

Japan--revise growth lower to negative 5.5% in 2020 and 2.7% in 2021.  We now see a more gradual recovery with downward revisions of 0.1 percentage points for 2020, and 0.5 percentage points for 2021. Weak consumption is the main driver of the downward revision with household spending remaining soft, notwithstanding the positive effect on sentiment from stimulus targeted at domestic travel.

Third-quarter consumption in real terms--while improving--was still almost 6% below the average of the five years before COVID. The labor market is past the worst with part-time jobs rebounding and the unemployment rate rising less than 1 percentage point from pre-COVID levels, to 3%.

Wages are adjusting downward, however, and in real terms are almost 2% lower than a year ago. Combined with renewed infection outbreaks, we expect weak wages to keep households cautious and real consumption to rise by 3% or less next year. Export growth should pick up but exposure to capital goods limits the upside given the prospect of weak global capital expenditure in 2021.

Headline and core consumer prices are deflating again, and we expect both to remain below 1% through 2023. The asymmetric nature of the shock and the hit on services and jobs is shown in the price of services (excluding imputed rent) falling by over 1% in recent months. The lack of demand-pull and cost-push pressures, especially wages, will constrain any rise in prices.

The government, under a new prime minister, looks set to reveal a third supplementary budget later this year with much of the effect coming in the fiscal year beginning April 2021. This is only likely to reduce, not reverse, the substantial tightening in the fiscal stance. The Bank of Japan will have little option but to keep its policy rate at the effective lower bound and maintain its yield curve control target of 0% on 10-year government bonds. A rapid appreciation of the yen or an intensification of deflationary pressures could trigger more policy easing, most likely in the form of measures aimed at directly supporting corporate financing.

Korea--forecasts broadly stable at negative 1.0% for 2020 and 3.6% for 2021.   Sporadic COVID-19 outbreaks have led to moderate reversals, but normalization remains broadly on track. Consumption stalled during the third quarter, but mobility and retail sales data have rebounded as infections subsided, notwithstanding another recent outbreak.

The labor market is key. While temporary jobs are rebounding after large losses earlier this year, we will need to see regular employment--which avoided COVID-19 losses--grow again.

Investment has been a drag on growth but stability in global trade policy and an ongoing revival in global demand should see a further pick-up in 2021 to above 2%. The Korean won has appreciated versus the U.S. dollar recently. Competitiveness remains less affected since the real effective exchange is close to its trend and little changed from its pre-COVID-19 level.

Structural downward pressures on inflation are reasserting themselves. We expect headline inflation to head back above 1% only in 2022, conditional on a robust recovery. In recent months, core inflation has slipped below zero for the first time in two decades. Services prices are now falling by almost 1% a year. Entrenched deflation and stubbornly high real interest rates remain a key risk for the economy.

Fiscal policy should tighten moderately through 2021 as the government unwinds stimulus. The Bank of Korea will have to shoulder the burden of supporting the recovery. The central bank, due to concerns about rising leverage and financial stability, appears reticent to cut its policy rate from its record low of 0.50% even though inflation is slipping further below its 2% target. We expect steady rates through 2023. The central bank may be forced to do more if deflation intensifies.

Indonesia--growth lowered to negative 1.7% in 2020 and 5.4% in 2021.  We lower our outlook for growth in Indonesia as the recovery in consumer demand has been very gradual. Retail sales were still down 8.7% year over year in September and consumer confidence has been soft. New COVID-19 cases remain persistently high and policymakers have used intermittent mitigation measures to prevent further pandemic escalation.

Strong exports have partially offset the weakness in consumption, and net trade is supporting growth. Fiscal policy will remain broadly accommodative next year as the government is set to avoid a sharp spending consolidation.

Policymakers have enacted reform measures that could be beneficial to the economy over the next five to 10 years. The Omnibus Law on Job Creation was passed into law and aims to streamline regulations. The law is broad but works on three key factors, including streamlining business licensing requirements, making environmental and regulatory permits less cumbersome, and relaxing some labor laws. Much depends on how the law is enforced in practice, and the reforms will have limited effect on near-term growth.

Bank Indonesia cut policy rates to 3.75% at its latest meeting in November, but real interest rates remain high. The weakness in domestic demand has driven core inflation lower this year. The central bank is sensitive to weakening of the Indonesian rupiah and has been constrained in easing policy further. The size of the central bank's version of quantitative easing, the Burden Sharing Program, remains modest at about 3% of GDP so far.

Malaysia--outlook revised lower to negative 5.6% in 2020 and 7.5% in 2021.  A second pandemic wave is leading to a fresh pullback in economic activity in Malaysia after the third quarter saw recovery in line with our expectations. External demand has been supporting growth, particularly for the electronics sector, but this will not offset the broader slowdown in activity. Growth will be weaker in the fourth quarter, and we lowered our growth forecast for 2020 by 60 basis points to negative 5.6%.

Prompt policy action limited damage to the labor market and the corporate sector, but the long duration of the downturn is now straining balance sheets. Policies such as hiring incentives have reduced the scale of job losses and the central bank's concessional loans have contained the economic damage. However, reduced incomes resulting from the long economic disruption will require balance-sheet repair in various sectors of the economy, dragging on growth. We lowered our growth forecast for 2021 to 7.5% from 8.4% earlier.

We anticipate one policy rate cut from 1.75% to 1.5% next year from Bank Negara Malaysia as core inflation has fallen about 50 basis points this year to 1% and headline inflation is negative. The central bank said it expects policy measures taken this year to continue supporting the economy, and the bank is unlikely to ease monetary policy aggressively.

Singapore--modestly lowered to negative 6.1% and 6.0% in 2020 and 2021.  Our growth forecast for 2020 is modestly lower from negative 5.8% earlier. Consumption remains weak; even though the pandemic is under control, there is considerable voluntary social distancing weighing on activity. Consumer-facing service sectors are particularly weak and likely to keep contacting in the next six months. These sectors are also large employers, which has meant that unemployment increased to 3.6% in the third quarter, which is higher than the peak unemployment rate during the global financial crisis.

Some factors are doing better. The electronics sector is particularly strong and drove growth of nearly 10% year over year in the manufacturing sector. External demand for manufactured goods remains strong, which is supporting industrial activity. The government has undertaken a fiscal stimulus of about 16% of GDP, the largest among Asia-Pacific economies that we track. This large fiscal stimulus and expanded public spending should support growth this year.

We expect fiscal stimulus to unwind beginning 2021. The Monetary Authority of Singapore's current policy setting is to keep the value of the Singapore dollar constant against a trade-weighted basket of currencies. The central bank will have to weigh a low inflation environment against strong trade performance in deciding whether to shift the currency lower. We anticpate no change in policy.

Thailand--revised higher to negative 6.4% for 2020 while the 2021 forecast is lowered to 5.0%.  Policymakers have gradually dialed up fiscal stimulus through the year, which is supporting growth. Direct fiscal stimulus for 2020 is now at 8.2% of GDP, the highest among regional emerging markets peers. Third-quarter growth of negative 6.4% was nearly 2 percentage points higher than consensus expectations. The stimulus is partially offsetting the sharp fall in output in the tourism sector, which accounts for about 11% of the economy. The government has introduced incentives to encourage domestic tourism to support the sector. Our 2020 GDP growth forecast is higher than our earlier projection of negative 7.2%.

Constraints in the rebound are political uncertainty, weaker business confidence, and a normalization of tourism that is likely to start only later in 2021. We expect growth of 5.0% next year, down from 6.2% earlier.

Fiscal policy will remain accommodative. The government budget aims to keep spending mostly unchanged in 2021. Inflationary pressures will remain muted and monetary policy is likely to remain unchanged as the Bank of Thailand is reluctant to cut policy rates below the current level of 0.5%.

Hong Kong--marked up to negative 5.8% in 2020, 2021 lowered to 4.8%.  Strong trade, a resilient financial sector, and robust fiscal stimulus are propping up growth in Hong Kong this year. Exports to mainland China have been particularly strong. Fiscal stimulus measures are large at about 11% of GDP. The financial services industry has been resilient and grew by 3% year over year in the third quarter, which is comparable to 2019. Hong Kong's competitive advantage in financial market intermediation and advisory business for Greater China will provide steady growth over the next couple of years, although the city could see more competition from mainland cities.

Private consumption activity remains weak; retail sales are still contracting sharply in year-on-year terms, and consumption contracted 7.7% year over year in the third quarter, compared with overall economic contraction of negative 3.4%. As a result, consumer-facing service industries are facing a challenging environment, and unemployment rose to 6.4% in the third quarter.

Overall, we revise our 2020 growth outlook up to negative 5.8%, and lower our forecast for 2021 to 4.8% from 4.9% previously.

Philippines--unchanged at negative 9.5% in 2020 and 9.6% in 2021.  New cases are trending down at a slow pace, leading to some improvements in the population's mobility and employment in the past few months. The economy is also gradually improving, but the disruption of a recent typhoon will delay the recovery. We keep our GDP growth forecast for this year and next unchanged. As before, the base-effect-driven high growth rates for the upcoming years mask the fact that the level of GDP will remain far below the pre-COVID trend even by the end of our forecast horizon.

Inflation remains high relative to how much domestic activity has fallen, in part due to the supply-side disruptions from recent typhoons. But with growth so low, we continue to pencil in one last rate cut from Bangko Sentral ng Pilipinas after this month's move, before a long pause. We continue to highlight the small fiscal response so far, at about 2.3% of GDP. We expect a boost from fiscal impulse in the second half of next year if key infrastructure projects start to ramp up again.

Taiwan--raised to 1.6% in 2020 and marginally lowered in 2021 to 2.9%.  The pandemic remained controlled throughout the year and strong manufacturing and export performance have supported growth. The electronics sector is driving the resilience in manufacturing and trade. Export orders have been growing strongly, especially from the U.S. and China. Consumption is set to improve further next year. These factors led to us to mark higher growth for 2020 from 1.0% earlier. We marginally lowered our 2021 from 3.0% earlier due to higher base effects in 2020.

Monetary policy should remain steady. Inflation will likely be negative this year at negative 0.2%, driven by energy prices. Core inflation is picking up as domestic demand recovers and is now up to 0.4% in October after shrinking during the first half of the year. We expect inflation to rise gradually to 1.1% in 2021 as energy prices stabilize and as strong consumption pushes core prices higher.


Table 1

Real GDP
Percentage change, year over year
Change from September 2020 forecast (%)
2019 2020e 2021e 2022e 2023e 2020e 2021e 2022e
Australia 1.8 (3.4) 4.0 3.2 2.6 0.6 (0.2) (0.1)
China 6.1 2.1 7.0 5.0 5.0 0.0 0.1 0.2
Hong Kong (1.2) (5.8) 4.8 2.9 2.2 1.4 (0.5) (0.4)
India 4.2 (9) 10.0 6.0 6.2 0.0 0.0 0.0
Indonesia 5.0 (1.7) 5.4 5.2 5.1 (0.6) (0.9) (0.6)
Japan 0.7 (5.5) 2.7 1.3 0.9 (0.1) (0.5) 0.3
Malaysia 4.3 (5.6) 7.5 5.2 4.6 (0.6) (0.9) (1)
New Zealand 2.2 (4.9) 4.3 2.9 2.9 0.6 (0.9) (0.3)
Philippines 6.0 (9.5) 9.6 7.6 7.5 0.0 0.0 0.0
Singapore 0.7 (6.1) 6.0 3.0 2.5 (0.3) (0.3) 0.3
South Korea 2.0 (1) 3.6 3.2 2.6 (0.1) 0.0 (0.2)
Taiwan 2.7 1.6 2.9 2.5 2.4 0.6 (0.1) (0.1)
Thailand 2.4 (6.4) 5.0 3.9 3.6 0.8 (1.2) (0.5)
Vietnam 7.0 2.3 10.9 6.8 6.8 0.4 (0.3) 0.0
Asia Pacific 4.6 (2) 6.8 4.7 4.6 0.0 (0.1) 0.1
Note: For India, 2019 means fiscal 2019/2020 (year ending March 31, 2020); 2020 means fiscal 2020/2021 (year ending March 31, 2021); and so forth. e—Estimate. Source: S&P Global Ratings.

Table 2

Year average, %
2019 2020 2021 2022 2023
Australia 1.6 0.7 1.4 1.6 1.9
China 2.9 2.8 2.1 2.2 2.2
Hong Kong 2.9 0.1 1.6 1.8 1.8
India 4.8 5.6 4.4 4.5 4.1
Indonesia 2.8 2.0 2.4 3.0 3.0
Japan 0.5 0.2 0.5 0.6 0.8
Malaysia 0.7 (1.1) 1.9 2.3 1.9
New Zealand 1.6 1.7 1.5 1.5 1.9
Philippines 2.5 2.8 3.0 2.6 2.5
Singapore 0.6 (0.2) 1.5 1.7 1.5
South Korea 0.4 0.6 0.9 1.0 1.0
Taiwan 0.6 (0.2) 1.1 1.0 1.0
Thailand 0.7 (0.8) 1.3 1.1 1.1
Vietnam 2.8 4.0 4.5 4.5 4.5
Note: For India, 2019 means fiscal 2019/2020 (year ending March 31, 2020); 2020 means fiscal 2020/2021 (year ending March 31, 2021); and so forth. e—Estimate. Source: S&P Global Ratings.

Table 3

Policy Rate
Rate at year end, %
2019 2020e 2021e 2022e 2023e
Australia 0.75 0.10 0.10 0.10 0.25
India 4.40 3.75 4.50 5.00 5.25
Indonesia 5.00 3.75 3.50 3.75 4.25
Japan (0.07) (0.04) (0.05) (0.05) (0.05)
Malaysia 3.00 1.75 1.50 2.00 2.50
New Zealand 1.00 0.25 0.00 0.50 0.75
Philippines 4.00 1.75 2.00 2.75 3.00
South Korea 1.25 0.50 0.50 0.50 0.50
Taiwan 1.38 1.13 1.13 1.13 1.13
Thailand 1.25 0.50 0.50 0.50 0.50
Note: For India, 2019 means fiscal 2019/2020 (year ending March 31, 2020); 2020 means fiscal 2020/2021 (year ending March 31, 2021); and so forth. e—Estimate. Source: S&P Global Ratings.

Table 4

Exchange Rate
Rate at year end, %
2019 2020e 2021e 2022e 2023e
Australia 0.7 0.73 0.73 0.74 0.75
China 6.99 6.6 6.5 6.5 6.6
Hong Kong 7.79 7.75 7.8 7.8 7.8
India 75.5 74.0 74.5 75.0 76.5
Indonesia 13883 14100 14280 14400 14520
Japan 109.12 104.5 104.0 103.5 103.0
Malaysia 4.09 4.11 4.14 4.17 4.2
New Zealand 0.67 0.69 0.7 0.70 0.71
Philippines 50.74 48.79 51.97 50.39 49.2
Singapore 1.35 1.35 1.34 1.34 1.33
South Korea 1157.8 1110 1100 1090 1080
Taiwan 30.11 28.5 28.3 28.1 28.1
Thailand 30.15 30.2 30.0 29.9 29.8
Note: For India, 2019 means fiscal 2019/2020 (year ending March 31, 2020); 2020 means fiscal 2020/2021 (year ending March 31, 2021); and so forth. e—Estimate. Source: S&P Global Ratings.

Table 5

Unemployment Rate
Year average, %
2019 2020e 2021e 2022e 2023e
Australia 5.2 6.6 6.5 6 5.8
China 5.2 5.7 5.4 5.1 5.0
Hong Kong 3.0 5.7 4.9 4.1 3.8
Indonesia 5.1 6.6 6.3 5.5 5.3
Japan 2.4 2.8 2.8 2.7 2.4
Malaysia 3.3 4.5 4 3.5 3.3
New Zealand 4.1 4.8 5.8 5.5 5.2
Philippines 5.1 10.5 7.9 6.1 4.8
Singapore 2.3 3.1 2.8 2.4 2.2
South Korea 3.8 3.8 3.7 3.6 3.4
Taiwan 3.7 3.9 3.7 3.7 3.6
Thailand 1.0 1.7 1.6 1.3 1.1
e--Estimate. Source: S&P Global Ratings.

Related Research

This report does not constitute a rating action.

Asia-Pacific Chief Economist:Shaun Roache, Asia-Pacific Chief Economist, Singapore (65) 6597-6137;
Asia-Pacific Economist:Vishrut Rana, Asia-Pacific Economist, Singapore + 65 6216 1008;

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