Economic Perspective of South East Asia in 2018
The ever growing population combined with above world-average GDP growth, it has been a commendable year end for the ASEAN-5, closing with an overall positive result for the Southeast Asian economic outlook.
World Total GDP VS ASEAN GDP
ASEAN’s GDP as a single unit when compared with the total global GDP is relatively more.
As per OECD, ASEAN current GDP is growing at 5.1%, while that of Latin America is around 1.5% to 2% after a temporary two year recession.
The second quarter of 2017 saw the global GDP rise by 3.7% as compared to the previous year. Since the global economy is increasing, the global GDP projects a 3¾ % in 2018, easing slightly in 2019.
According to McKinsey’s report, Southeast Asia has three global trends which can be achieved by:
- Southeast Asia needs to increase its labor productivity to bring in more global production.
- Following the urbanization shift- by 2030, as per statistics, more than 90% of the rural population is most likely to shift to the urban areas. With constant rise in the consumer class an
infrastructural shift will become mandatory, costing almost $US 7 trillion.
- An absolute new technology replacing the existing technology- five technologies that have led to major improvements in improving the productivity of Southeast Asia are Mobile Internet, big
data, Internet of things, cloud and automation of knowledge work.
Yearly GDP Growth
According to the estimated and current GDP projection by the International Monetary Fund, most of the countries show a rise in productivity from the previous year, only Malaysia and Thailand projecting minimum decrease in the GDP.
GDP Growth of Indonesia
Asian Development Bank states that Indonesia’s GDP rise has strengthened both the investments and exports of the country.
The Indonesia Economic Outlook from Focus Economics further shows the retail sales in October along with an increase in the export growth. Tax revenues will also be increased and the government has been amending the existing contracts with many of Indonesia’s biggest mining companies.
GDP Growth of Vietnam
Vietnam’s 20% rise in economic outlook in 2017 was mainly because of its growing exports.
Manufacturing, exports, disbursed foreign direct investment and consumer prices changes gave 12.8%, 19.8%, 13.4% and 3.4% rise respectively to Vietnam’s increased productivity.
GDP Growth of the Philippines
GDP per capita growth in emerging markets and stronger output prospects are dependent on the supply-side development improvements.
CPI and Inflation
Variation in prices for retail goods and other services, though fixed and changeable from time to time monthly, quarterly or yearly, is measured by the Consumer Price Index (CPI).
Asian Development Outlook 2017 shows Myanmar increasing prices and the factors behind this rise-increase in money supply to private business for credit and an inadequate contribution of rice due to floods.
Average CPI of Vietnam rose by 3.53% in 2017 from that of 2016.
Another reason of Vietnam’s continual increase in prices is because of the country’s electricity.
Import prices, expectations of the public and capacity pressures in the domestic economy are the few major reasons for the low inflation rate.
Global Credit Outlook
2017 was considered a breakthrough with improved economic status for the emerging markets.
Though Cyprus and Serbia have upgraded but due to BB grade have landed on lower ranks compared to Thailand and the Philippines.
The Philippines deficiency can be managed by it’s less than a -0.5% of GDP. Inflow of foreign direct investments will cover up for the country’s present undersupply.
Indonesia’s External Finance has become stronger to external vulnerabilities. This is because of its improvement in external unit and the government’s focus on framing macroeconomic stability policy.
South-East Asia’s population contributes 8.59% of the world’s total population and 48.7 % of SE Asia’s population being urban, the average age is 28.8.
Since the ASEAN nation is young and attracting markets, people with a savings of $US 16 – $US 100/day is expected to reach 400 million by 2020.
Southeast Asia’s Customer Behaviour
HKTDC Research shows ample growth of all the customer related markets, though the retailer and manufacturer of the customer products should better themselves in engaging the customers to the fullest. Since access to technology becomes easier, brand loyalty is ought to be maintained.
Consumer Confidence Index (CCI)
From the last years result, the Consumer Confidence Index of 2017 shows major progress.
Data revealed from a feedback survey of the last six months outlook on 5 economic factors, with over 9153 respondents, Singapore and Malaysia showed the greatest improvement. While Indonesia, Philippines and Vietnam remained constant.
Choosing Consumer Markets
Gone are the traditional marketing strategies, where people thought busiest areas bring more business.
Nielsen and AlphaBeta research shows that areas with lower density are bringing in more business opportunities.
The importance of capital cities like Manila, Jakarta and Bangkok are also stressed upon by the research though these cities will not be dominant among the ASEAN consumers.
Individual products need to be developed by the companies specifically on a micro-regional basis and considering the regional market conditions.
ASEAN Millennial Consumers
The ASEAN countries are dominated by the youths mostly thus the millennial in the areas are hoping for a better market in the coming six months.
The economic development of any country is directly related to its consumer confidence. And the current scenario brings the ASEAN countries on a better page.
Cambodian millennial scores 95.4 in this relation. p>
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