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2017 will be better than you think, with Asia leading the way
Published: 16 January 2017
2017 will be better than you think, according to Deloitte, who today released the first edition of their Voice of Asia series. Despite protectionist rhetoric from the US and gloomy forecasts from the IMF, three factors suggest global growth is about to surprise on the upside, with Asia leading the way.
Chris Richardson, Deloitte Australia Economist explained that “first, the global economy is finally
Following a series of shocks that began with the global financial crisis and then, in quick succession, the Eurozone debt crisis and the geopolitical shocks in the Middle East,
Trade picking up
World trade volumes were damaged by successive crises and shocks in recent years, but leading indicators suggest volumes are ready to lift. Of course, there will still be risks in 2017, the largest of which may be the anticipated depreciation of the Chinese Yuan, which could affect the region’s nascent recovery.
“The continuing devaluation of the Chinese Yuan is necessary, though how the Chinese government manages it will be key. If it’s too aggressive, other Asian currencies may also fall – which could tempt the incoming US President to follow through on his protectionist rhetoric and hit trade,” said Sitao Xu, Deloitte China Economist.
“Asia is increasingly plugged into China-centric value chains. Any impact on China from yuan devaluation or other policy changes could have a significant knock-on effect on other Asian economies. However, in the long run, most economies in Asia will benefit if China succeeds in rebalancing its economy.”
While President-elect Trump is still largely an unknown quantity, his influence on global trade may be overstated. Indicators point to Asian and global trade strengthening, despite the rise of nationalistic and protectionist voices globally.
Asia’s mega-economies, China and India, are increasingly being powered by consumer booms, providing Asia with an additional line of
Sitao Xu, Deloitte China Economist commented, “A new and optimistic generation is taking the lead in driving the direction of their economies: one that is technologically savvy, comfortable with the borderless consumerism of the global middle class, and yet imbued with the consumption-smoothing instincts of its parents and grandparents.”
The new generation of
“Our Voice of Asia report points to a range of reasons for confidence in 2017 – from growth to trade, culture to commerce – that underpin Asia's current and future prosperity. The interdependence of our region reflects what's possible in the year ahead, also shaping a more positive overall global outlook,” said Patrick Tsang, CEO, Deloitte China.
For more analysis and details on the Voice of Asia, please visit Deloitte Insights.
This edition gives the near-term outlook for Malaysia, the Philippines, Taiwan, and Vietnam, in addition to a deep-dive into Asian exports.
This edition examines the issues and economic trends in the United States, China, Eurozone, India, Japan, United Kingdom, Russia, and Turkey.