Asia Pacific Economic Outlook —— May 2012

　　Australia: Thanks to booming investment, Australia’s resource sector is climbing to new heights. At the same time, declining housing prices, unemployment woes, and ebbing external demand are weighing on the country’s economic growth prospects.

　　China: A surge in bank lending, an acceleration of industrial production, and improving retail sales may spur growth in the coming quarter. On the other hand, declining foreign direct investment suggests ongoing economic stress. The Chinese government also decided to allow the renminbi to float in a wider band and continues to stockpile oil.

　　India: Policy inertia, declining investment, poor business confidence, growing trade deficits, and surging capital outflows are chipping away at the value of the rupee and resulting in a downward revision of India’s growth expectations.

　　Malaysia: Resilient demand and a steady stream of foreign investment are strengthening the Malaysian economy, which is expected to grow by 4.7 percent this year. However, the potential for extreme contractions in the West and a hard landing in China continue to cloud Malaysia’s otherwise-favorable outlook.

　　South Korea: High oil prices, inflation, mounting household debt, and stock market volatility are dampening domestic consumption. The country’s economic slowdown is expected to reverse by the second quarter, and GDP growth will likely improve during the latter part of the year.