INTRODUCTION OF ASIAN ECONOMY

The overview of Asian economy in terms of their economic outlook as

we looking at the economic indicators like real GDP, inflation, employment
and poverty. The outlook for Asia is one of steady growth. GDP growth is
forecast to improve slightly in 201415 to 5.5 percent, helped by stronger
growth in advanced economies, healthy labor markets, and robust credit
growth. Asia is also facing various risks originating from within the region.
These include a sharper-than-envisaged slowdown and financial sector
vulnerabilities in China, less effective Abenomics, and political tensions and
uncertainty. Amid flat or declining global commodity prices, and with some
slack remaining in most economies, inflation has generally been low across
most of the region. The regions strong economic performance in 2007 had a
positive impact on its labor markets. Other than that, employment in ASEAN
countries increased from 260.6 million in 2006 to 268.5 million in 2007, an
increase of 3%, or 7.0 million additional jobs. Employment growth was
particularly strong in Singapore (6.6%) and Indonesia (4.7%). Over the
decades, Asia registered an extraordinarily large decline both in the numbers
of the poor and the levels of poverty; the numbers came down by half, from
1,543 million to 758 million persons and the level from 55.2 percent to 20.8
percent. Led by China, East Asia and Pacific reduced its poverty incidence by
43.8 percentage points, lifting 676 million people out of poverty. It is
important to note that the poverty levels in East Asia and Pacific in the initial
year were higher than in South Asia.

Economic outlook: Real GDP

Asia should experience robust growth throughout 2014 and 2015. GDP
growth is forecast at 5.4 percent in 2014 and 5.5 percent in 2015 (Table 1.1),
a modest improvement over 2013. Stronger growth in advanced economies
and generally more competitive exchange rates will help propel Asias
exports. Domestic demand across the region is expected to continue to be
underpinned by healthy labor markets.

Asias growth is set to benefit from the decline in oil prices since the
fourth quarter of 2014. While much of the initial decline in oil (and other
commodity) prices has been due to weaker global demand, increased supply
has played a more important role since late last year. Simulations suggest
that the decline in oil prices could boost global GDP by 0.3 percentage point
to 0.7 percentage point in 2015, depending on the assumed contribution of
demand and supply factors to the price decline (Arezki and Blanchard 2014).

Asias growth is forecast to remain steady in 2015, although the region

will continue to outperform the rest of the world (Figure 1.2). In addition to
country- and region-specific factors, this forecast reflects four concurrent
global cross-winds: lower oil prices, asynchronous monetary policies and
exchange rate divergence in major economies, shifting financial conditions,
and the moderating pace of potential growth.
Economic outlook: Inflation

Inflation is expected to remain contained. Output gaps are expected to

close only gradually across Asia and commodity prices are forecast to remain
soft in the near term (April 2014 World Economic Outlook). Korea, Thailand,
and New Zealand, inflation is expected to remain well below the official
central bank target. As in 2013, India and Indonesia are likely to confront
relatively high inflation rates, but price pressures are expected to be on a
downward path, in part due to the recent tightening of monetary policy.

As inflation increased, monetary policy changed from mostly neutral to

contradictory by mid 2008. But as the impact of the global financial crisis on
economic growth became more evident by the fourth quarter of 2008,
monetary policy started to ease. Cuts in policy rates can be expected to
continue in 2009. Consistent with monetary easing and the deterioration in
current account balances, Southeast Asian currencies depreciated, especially
towards the end of 2008 and into 2009. As for fiscal policy, in most countries
during 2008, budget deficits were small and balances remained stable or
improved slightly, thus according to ESCAP (2009) the sub-region has fiscal
space for an expansionary and coordinated response to the global financial
crisis.
Economic outlook: Employment
As such Asian companies are increasing their head count to support the
growth opportunities and with this bring a new level of human capital
expectations. The regions strong economic performance in 2007 had a
positive impact on its labour markets. Employment in ASEAN countries
increased from 260.6 million in 2006 to 268.5 million in 2007, an increase of
3%, or 7.0 million additional jobs. Employment growth was particularly strong
in Singapore (6.6%) and Indonesia (4.7%). About 64% of the regions
employment growth in 2007 was in the form of increased wage employment,
which indicates a possible expansion in formal employment opportunities.

Factors that impact on the working engagement levels within this region:

 Growth Opportunities, people have opportunities to leave and find new

employee if disengaged
Young Market, employees have the opportunity to make a difference
when they feel engaged and connected to the company
New Markets, many companies are new, smaller and able to quickly
respond to change, couple with growth opportunities can play an
exciting role for career progression, however also results in new job
opportunities to challenge and growth your skill set with another
company.
Unemployment shrank by about 555 000, or 3.2%, easing to 16.5 million
in 2007. The regions unemployment rate declined from 6.1% in 2006 to
5.8% in 2007. Much of the improvement comes from positive developments
in Indonesia and the Philippines two populous countries with high
unemployment rates in recent years. Unemployment in Indonesia dropped
sharply from 10.3% in 2006 to 9.1% in 2007. In the Philippines it declined
from 7.3% to 6.3%.
An estimated 1.5 million ASEAN workers leave their home countries each
year to work abroad, including within the ASEAN region. Intra-ASEAN
migration has helped address the labour shortage in the regions receiving
countries, contributing to both increasing productivity and economic growth.
For sending countries, remittances from their migrant workers can spur
investment in economic and local development.
Turning now to "self-employed workers", Figure 9 illustrates Indonesia has
the highest percentage of "self-employed workers" followed by Viet Nam,
Cambodia, the Philippines (declining slightly) and Thailand. The lowest
percentage of "self-employed workers" is found in the more developed
economies of Singapore and Malaysia. This is an important trend that points
to the importance of moving forward from self-employment and towards

salaried employment, an issue which should be reflected in government

policies in the less developed economies of Southeast Asia. That is to say, as
economies become more advanced, governments in the region should give
attention to strategies that facilitate the transition of entrepreneurs and selfemployed in the informal economy into the formal economy. They should
also

focus

their

efforts

on

skills

development

and

productivity

of

organisations that operate in the formal sector - especially those that are
involved in higher value-added production - and support high skill
development so that more and better jobs can be generated and local
innovation systems improved.
Economic outlook: Poverty
Developing Asia has achieved spectacular progress in reducing
poverty. Between 1990 and 2010, Asia lifted 786 million people out of
poverty, bringing down the headcount ratio to 20.8 percent from a high of
55.2 percent. In 2010, Asias share of the poor in the worlds (developing
countries) total poor stood at 62.4 percent, roughly equal to its share in
population, an impressive performance since 1990 when Asia accounted for
81 percent of the worlds poor. Despite this spectacular performance,
poverty remains a formidable challenge for Asia. According to the World
Bank, 758 million people in Asia are still below the US $ 1.25 poverty line.
Indeed, on measures of the numbers of the poor and their share, global
poverty is often viewed as a predominantly Asian phenomenon.
Asias rapid economic growth has put it on track to eradicate extreme
poverty. This lifts Asias 2010 poverty rate to nearly one-third of the
population, adding 343m people to the ranks of the poor. The Asian
Development Bank believes food insecurity, and the risks of natural
disasters, global economic shocks and the like, should also be taken into
account when measuring poverty. This would further raise Asias 2010
poverty rate, to nearly 50%.

For example, poverty in Indonesia. Out of a population of 252 million,

28.6

million

Indonesians

currently

live

below

the poverty

line

and

approximately 40 percent of all people remain clustered around the national

poverty line set at 330,776 rupiah per person per month ($22.6). After
declining for six years the number of poor people has increased sharply.
Some 39m, 18% of the population of 252 million, are now officially poor,
according to data just released by the government's statistics bureau, 4
million more than in 2005. Government officials admit their target, a poverty
level of 8.2% by 2009, is anyway unattainable. The current economic growth
rate of around 5% is insufficient to provide all new job-seekers with
employment, let alone dent Indonesia's huge unemployment tally. Ministers
did announce earlier this month an extra $1.4 billion for poverty alleviation in
2007, 18% up on 2006. This will be distributed through a communityempowerment programme, under which each village will be given up to
$110,000 more than this year to create jobs in the way it deems best. The
goal is 15m additional jobs within three years, with 12.5m of them coming
through the village schemes and the rest from the development of the
plantation industry.