Monetary Authority of Singapore Annual Report 2011/2012
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Weaker External Demand and Supply Disruptions Tempered Growth in Asia

The Asia ex-Japan economies grew by a slower, but still-healthy 5.9% in 2011, down from 8.2% in 2010. While sluggish demand from the industrialised countries weighed on growth, domestic demand remained firm in most of the region. In particular, household spending stayed resilient, supported by rising incomes as labour markets continued to be tight following the sharp economic rebound from the global financial crisis. In China, gross capital formation provided a further boost to the economy, although monetary tightening policies moderated residential investments and hence weighed on overall GDP growth towards the latter part of 2011.

The deceleration in growth was more pronounced in the trade-oriented economies of Asia ex-Japan. In addition to slackening G3 demand, shipments of electronics and vehicle components from these countries were hit by supply chain disruptions arising from the natural disasters in Japan and Thailand. Nonetheless, countries which had similar production structures to the disaster-hit economies benefited to some extent, from the diversion of orders. The resource-rich ASEAN economies also gained from the robust appetite for commodities from China, as well as reconstruction works in Japan.