Monetary Authority of Singapore Annual Report 2012/2013
Anchor of Economy


Growth in Asia ex-Japan Slowed amid Sluggish External Demand

Growth in the Asia ex-Japan economies slackened for the second consecutive year, falling to a post-crisis low of 5.1% in 2012 from 5.9% in 2011. The region’s export performance last year was buffeted by sluggish demand from the advanced economies while an investment slowdown in China weighed on intra-regional trade. The Chinese economy expanded by 7.8% in 2012, the slowest pace in 13 years, as tight monetary policy and property restrictions curtailed real estate sales and construction, which in turn had a cascading effect on primary commodity exporters such as Indonesia and Malaysia.

Nevertheless, resilient domestic demand took up the slack in exports and supported economic activity in much of the region. In fact, growth in the ASEAN-4 economies accelerated to 6.1% in 2012 from 4.5% in 2011, as an investment upswing, a step-up in public infrastructure projects and increased government transfers boosted spending. In the more externally-oriented NIEs, the knock-on effects of muted trade activity on corporate investment pulled GDP growth down to a three-year low in 2012. Towards the end of the year, however, these economies started to recover on the back of a turnaround in exports to China and a modest upturn in the global electronics cycle.