Economy and Output. Key Trends. Key Indicators for Asia and the Pacific 2011

Transcription

1 156 Economy and Output Asia generated a third of global GDP (gross domestic product) in 2009 in purchasing power parity terms. The big three the People s Republic of China, Japan, and India dominate the region, accounting for more than 70% of total GDP. While in 2009 the GDP of 15 economies contracted in real terms, only two reported negative growth in 2010, bringing the unweighted average growth for 37 economies in the region to 5.9% in 2010 from 1.4% in There are striking disparities in per capita GDP within Asia and the Pacific, with the richest (Singapore) being 45 times better off than the poorest (Nepal) in The disparities, however, have narrowed down since Key Trends The Asia and Pacific region generates one-third of global GDP. Figure 2.1 divides the real GDP of the world economy for 2009 into seven regions. Each country s GDP has been converted into a common currency using purchasing power parity (PPP). North America includes Mexico and the Caribbean islands, while Asia and the Pacific covers both developed and developing regional members of ADB. Figure 2.1 shows that in 2009, Asia and the Pacific accounted for exactly one-third of global GDP. Europe accounted for about 28%, North America about 24%, and the other regions in total generated only 15% of global GDP. The same figure shows that within Asia, the People s Republic of China (PRC) and Japan together account for more than half of the region s GDP while India is currently ranked just behind Japan. Given the disparity between their growth rates with India growing much faster than Japan in recent years, India is likely to soon overtake Japan as the second largest economy in Asia and third in the world. The big three the PRC, Japan, and India continued to dominate the region in 2010, accounting for more than 70% of total GDP. Figure 2.2 shows the distribution in 2010 of GDP among 11 economies that each accounted for at least 1% of Asia and the Pacific GDP in PPP terms. With their high and steady growth rates, the PRC and India can be seen as the locomotives of the Asia and Pacific region. The growth of the giants stimulates trade within the region and promotes growth of the smaller economies. However, the region is not self-supporting. North America and Europe are still the most important customers for the final output of factory Asia, so if the present recovery in North America and Europe falters or turns into another recession, factory Asia will inevitably suffer. Figure 2.1 Percentage Distribution of GDP at PPP: Asia and the Pacific in the World Economy, 2009 South America 5.6 Africa 3.9 West Asia 3.6 Rest of the World 2.0 Japan 16.8 India 15.6 Others 7.6 North America 23.6 Europe 28.2 Asia and the Pacific 33.3 Sources: Table 2.1 and World Development Indicators Online (World Bank 2011). China, People's Rep. of 37.2 Philippines 1.4 Korea, Rep. of 5.4 Indonesia 3.9 Australia 3.5 Taipei,China 3.0 Thailand 2.2 Pakistan Malaysia

2 ECONOMY AND OUTPUT 157 China, People's Rep. of 38.5 Japan 16.3 Figure 2.2 Percentage Distribution of GDP in PPP Terms in Asia and the Pacific, 2010 Source: Table 2.1. India 15.9 Others 6.6 Philippines 1.4 Malaysia 1.6 Pakistan 1.8 Thailand 2.2 Taipei,China 3.1 Australia 3.2 Indonesia 3.9 Korea, Rep. of 5.4 There are striking disparities in per capita GDP within Asia and the Pacific, although there has been some convergence since Figures 2.3a and 2.3b show the indices of per capita GDP in PPP terms for 33 economies in the region for 2000 and 2010, respectively. The per capita indices are based on the average for all the 33 reporting economies in the region equated to 100. The red lines in both figures are the 100 mark so economies whose bars are to the left of the red lines have per capita GDP below that year s regional average, and those whose bars pass the red line have average income above that year s regional average. Thus, for example, the per capita GDP of the PRC stopped short of the red line in 2000 but in 2010, its per capita GDP had moved slightly past the red line from being poorer than the regional average in 2000, the PRC s population was now a little richer. It should be noted that in absolute terms of course, the PRC s population was much richer in 2010 than in 2000 because the regional averages themselves had grown substantially over the period. In 2000, Brunei Darussalam and Singapore were at the top of the chart ahead of Australia, followed by Hong Kong, China; Japan; and Taipei,China. By 2010, these rankings had changed Singapore had overtaken Brunei Darussalam as the richest economy in the region. Hong Kong, China had overtaken Australia; and Taipei,China had overtaken Japan. The rankings change because economies are growing faster or slower than each other. Per capita GDP in Hong Kong, China; Singapore; and Taipei,China grew faster than the regional average so that they all moved up in the ranking, while per capita GDP in Australia, Brunei Darussalam, and Japan grew more slowly than the regional average and they slipped down. In terms of their rankings, the big gainers between 2000 and 2010 were Armenia, Azerbaijan, the PRC, Kazakhstan, the Maldives, and Mongolia. Their indices all increased substantially because their per capita GDP increased much faster than the regional average. The big losers were Brunei Darussalam, Japan, Kiribati, the Federated States of Micronesia, Nepal, and Tonga. Indeed all economies became richer over the period, but some did so much faster than others. In summary, despite progress in all economies, the differences in the per capita GDP between the rich and the poor economies remain huge in 2010, with the richest economy (Singapore) being 45 times better off than the poorest (Nepal). Brunei Darussalam Singapore Australia Hong Kong, China Japan Taipei,China Korea, Rep. of Malaysia Thailand Kazakhstan Average for Regional Members Tonga Maldives Sri Lanka Samoa Micronesia, Fed. States of Average for Developing Members Philippines Indonesia China, People's Rep. of Georgia Azerbaijan Kiribati Armenia Papua New Guinea Pakistan India Mongolia Viet Nam Kyrgyz Republic Solomon Islands Lao PDR Nepal Cambodia Bangladesh Source: Table 2.2. Figure 2.3a Indices of Per Capita GDP, 2000 (regional average = 100) ,000 1,100 1,200 1,300 REGIONAL TABLES

3 158 ECONOMY AND OUTPUT Average for Developing Members Source: Table 2.2. Figure 2.3b Indices of Per Capita GDP, 2010 (regional average = 100) Brunei Darussalam Singapore Australia Hong Kong, China Japan Taipei,China Korea, Rep. of Malaysia Thailand Kazakhstan Average for Regional Members Tonga Maldives Sri Lanka Samoa Micronesia, Fed. States of Philippines Indonesia China, People's Rep. of Georgia Azerbaijan Kiribati Armenia Papua New Guinea Pakistan India Mongolia Viet Nam Kyrgyz Republic Solomon Islands Lao PDR Nepal Cambodia Bangladesh ,000 1,100 1,200 1, saw a strong recovery throughout the region as developing economies proved their resilience after the crisis. Figure 2.4 compares growth in real (constant price) GDP for 2009 and In 2009, the GDP of 15 economies contracted in real terms but only two reported negative growth in 2010 Kiribati and the Kyrgyz Republic. Meanwhile, in only four cases was growth in 2010 slower than 2009 Azerbaijan, the Kyrgyz Republic, Myanmar, and Timor-Leste. Although Kiribati had negative growth in 2010, it should be noted that GDP had fallen even faster in The unweighted average growth for the 37 economies in Figure 2.4 went up from 1.4% in 2009 to 5.9% in The larger economies, especially India and the PRC, had weathered the crisis better than most economies in the region and they continued to grow strongly in India reported real growth of 8.5%, and the PRC 10.3%. Others with strong growth included Myanmar (10.4%); Singapore (14.5%); and Taipei,China (10.8%). Both Singapore s and Taipei,China s growth represent a striking turnaround from 2009 when their real GDP actually declined, demonstrating the vulnerability of export-driven economies to events in the rest of the world that are outside their control. Source: Table Figure 2.4 Real GDP Growth, 2009 and 2010 (%) Singapore Taipei,China Myanmar China, People's Rep. of Maldives India Uzbekistan Sri Lanka Lao PDR Thailand Philippines Malaysia Solomon Islands Papua New Guinea Kazakhstan Hong Kong, China Viet Nam Georgia Korea, Rep. of Mongolia Indonesia Timor-Leste Cambodia Bangladesh Azerbaijan Nepal Japan Pakistan Vanuatu Brunei Darussalam Australia Armenia Samoa Micronesia, Fed. States of Tonga Kiribati Kyrgyz Republic

4 ECONOMY AND OUTPUT 159 Strong growth in Asia and sluggish growth in North America and Western Europe are shifting the economic balance to Asia. Figures 2.5a and 2.5b show the world s 10 largest economies in PPP terms for the years 2000 and 2009, respectively. The US is still the dominant economy accounting for nearly a fifth of global GDP but the next three are all in Asia the PRC, Japan, and India. Assuming that the PRC continues to grow at least 5 percentage points faster than the US, it will become the world s largest economy by the end of the present decade. Likewise, given the recent high growths of India vis-à-vis Japan, India will soon overtake Japan as number three. China, People's Rep. of Figure 2.5a Top 10 Economies in the World in Terms of GDP at PPP, 2000 (% of global GDP) United States Japan Germany India Recall that the GDP shares here are calculated using PPPs. This means that differences in price levels have been removed so that the comparisons are in real or volume terms, that is, they compare the volumes of goods and services being generated in each of the world s economies. It only became possible to make such comparisons on a global basis after the 2005 round of the International Comparison Program (ICP). Intercountry comparisons of GDP are still sometimes made after converting to a common currency using exchange rates. Such comparisons are difficult to interpret because they mix together differences in volumes and differences in prices. Many of the countries now reporting high shares of gross domestic capital formation are creating a basic infrastructure for future growth. Figure 2.6 shows that in 2010, gross domestic capital formation exceeded 40% of GDP in the PRC and Mongolia, and was over 30% in Armenia, India, Indonesia, and Viet Nam. Capital formation provides the basis for growth of an economy and these high rates will generate continued high growth REGIONAL TABLES United Kingdom France Italy Figure 2.6 Gross Domestic Capital Formation as a Percentage of GDP, 1995 and 2010 Brazil Russian Federation Sources: Table 2.1 and World Development Indicators Online (World Bank 2011). China, People's Rep. of Japan India Germany Russian Federation Figure 2.5b Top 10 Economies in the World in Terms of GDP at PPP, 2009 (% of global GDP) United States United Kingdom France Brazil Italy Sources: Table 2.1 and World Development Indicators Online (World Bank 2011) China, People's Rep. of Mongolia Viet Nam India Armenia Indonesia Tonga Korea, Rep. of Kyrgyz Republic Sri Lanka Thailand Kazakhstan Bangladesh Uzbekistan Singapore Hong Kong, China Myanmar Taipei,China Malaysia Philippines Cambodia Azerbaijan Pakistan Australia Japan Source: Table

5 160 ECONOMY AND OUTPUT rates of GDP in years to come. Some of the economies at the lower end of Figure 2.6 will need to invest more if they are to achieve consistently high rates of growth. Much of the capital formation in Asia is in the form of infrastructure, e.g., roads, railways, communications networks, bridges, dams, and airports, rather than in machinery and equipment. The economies with high shares of capital formation in GDP are now building up a modern infrastructure, while many of those with lower shares are more mature economies where much of the necessary infrastructure is already in place. Hong Kong, China; Malaysia; Singapore; Taipei,China; and Thailand may be in this situation they all had high rates of capital formation in 1995 but their shares of capital formation in GDP are now more in line with those reported by the two developed economies at the bottom of Figure 2.6. Private consumption generally absorbs a much smaller share of GDP in Asia and the Pacific than in North America and Europe. Private consumption shares in GDP are shown in Figure 2.7. Shares range from a high of 84% in the Kyrgyz Republic to just 23% in Brunei Darussalam. Many of the countries with high shares are the poorer countries in the region. The counterpart to a high consumption share is low household saving, which in turn implies low capital formation in poor countries, households cannot afford to save, but the lack of saving in itself keeps them from getting richer by building up the country s stock of capital. The red bars signify economies that have run surpluses on their balance of payments current account for at least the last five years. Some of these countries are at the center of the global rebalancing debate, and are seen as having important roles in aiding the global rebalancing process by encouraging domestic consumption. In five of these Azerbaijan, Brunei Darussalam, the PRC, Malaysia, and Singapore private consumption is less than half of GDP. These shares are low when compared with North America and Western Europe, where private consumption typically accounts for at least 60% of GDP and shares of 70% are not uncommon. In some of these economies the PRC, Malaysia, and Singapore, for example private consumption might be low as social safety nets are underdeveloped. Households need to accumulate large precautionary savings for retirement, ill health, unemployment, or children s education. Figure 2.7 Private Consumption Expenditure as a Percentage of GDP, 2010 Kyrgyz Republic Pakistan Nepal Armenia Myanmar Cambodia Georgia Bangladesh Philippines Viet Nam Sri Lanka Hong Kong, China Japan Taipei,China India Indonesia Mongolia Australia Thailand Korea, Rep. of Malaysia Kazakhstan Azerbaijan Singapore China, People's Rep. of Brunei Darussalam Source: Table 2.7. Data Issues and Comparability The national accounts statistics are all compiled according to the United Nations System of (SNA). Many countries still use the 1968 version of the SNA. Others have changed to the 1993 SNA or are in the process of doing so. The differences between the two systems are not significant for most countries when comparisons are made for GDP and its main components. The national accounts data can therefore be considered as reasonably comparable. The PPPs for Asia were calculated as part of the global 2005 International Comparison Program (ICP) exercise coordinated by the World Bank. Extensive consultations were held with participating economies to ensure the comparability and reliability of the PPP calculations. PPPs for 2005 were directly calculated for 31 ADB regional members. For an additional 14 ADB regional members, PPPs were calculated by the ICP Global Office located at the Development Data Group of the World Bank, mainly on the assumption that PPPs are a function of per capita gross national income calculated using the World Bank Atlas Method.

6 ECONOMY AND OUTPUT 161 Table 2.1 Gross Domestic Product at PPP (current international dollars, million) Afghanistan Armenia Azerbaijan Georgia Kazakhstan Kyrgyz Republic Pakistan Tajikistan Turkmenistan Uzbekistan REGIONAL TABLES China, People s Rep. of Hong Kong, China Korea, Rep. of Mongolia Taipei,China Bangladesh Bhutan India Maldives Nepal Sri Lanka Brunei Darussalam a Cambodia Indonesia Lao PDR Malaysia Myanmar Philippines Singapore Thailand Viet Nam Cook Islands Fiji, Rep. of Kiribati Marshall Islands Micronesia, Fed. States of Nauru Palau Papua New Guinea Samoa Solomon Islands Timor-Leste b Tonga Tuvalu Vanuatu Australia Japan New Zealand DEVELOPING MEMBER ECONOMIES c REGIONAL MEMBERS c b GDP estimates refer to non-oil GDP. Before 2002, estimates include the value added of United Nations activities. c For reporting economies only. Sources: ADB staff estimates using World Development Indicators Online (World Bank 2011), country sources, CEIC data, and US Bureau of Economic Analysis.

7 162 ECONOMY AND OUTPUT Table 2.2 GDP Per Capita at PPP (current international dollars) Afghanistan Armenia Azerbaijan Georgia Kazakhstan Kyrgyz Republic Pakistan Tajikistan Turkmenistan Uzbekistan China, People s Rep. of Hong Kong, China Korea, Rep. of Mongolia Taipei,China Bangladesh Bhutan India Maldives Nepal Sri Lanka Brunei Darussalam a Cambodia Indonesia Lao PDR Malaysia Myanmar Philippines Singapore Thailand Viet Nam Cook Islands Fiji, Rep. of Kiribati Marshall Islands Micronesia, Fed. States of Nauru Palau Papua New Guinea Samoa Solomon Islands Timor-Leste b Tonga Tuvalu Vanuatu Australia Japan New Zealand DEVELOPING MEMBER ECONOMIES c REGIONAL MEMBERS c b GDP estimates refer to non-oil GDP. Before 2002, estimates include the value added of United Nations activities. c For reporting economies only. Sources: ADB staff estimates using World Development Indicators Online (World Bank 2011), country sources, CEIC data, and US Bureau of Economic Analysis.

8 ECONOMY AND OUTPUT 163 Table 2.3 GNI Per Capita, Atlas Method (current US$) a Afghanistan Armenia Azerbaijan Georgia Kazakhstan Kyrgyz Republic Pakistan Tajikistan Turkmenistan Uzbekistan REGIONAL TABLES China, People s Rep. of Hong Kong, China Korea, Rep. of Mongolia Taipei,China b Bangladesh Bhutan India Maldives Nepal Sri Lanka Brunei Darussalam c Cambodia Indonesia Lao PDR Malaysia Myanmar Philippines Singapore Thailand Viet Nam Cook Islands b Fiji, Rep. of Kiribati Marshall Islands Micronesia, Fed. States of Nauru b Palau Papua New Guinea Samoa Solomon Islands Timor-Leste Tonga Tuvalu b Vanuatu Australia Japan New Zealand a Preliminary estimates of the World Bank for reclassification of economies. Data have yet to be reconciled with historical time series in the World Development Indicators database. b Based on GDP per capita and exchange rates from the country source. c Brunei Darussalam is a regional member of ADB, but it is not classified as a developing member. Sources: World Development Indicators Online, Open Data Initiative (World Bank 2011); ADB staff estimates derived from country sources.

9 164 ECONOMY AND OUTPUT Table 2.4 Agriculture Value Added (percent of total value added) Afghanistan Armenia Azerbaijan Georgia Kazakhstan Kyrgyz Republic Pakistan Tajikistan Turkmenistan Uzbekistan China, People s Rep. of Hong Kong, China Korea, Rep. of Mongolia Taipei,China Bangladesh Bhutan India Maldives Nepal Sri Lanka Brunei Darussalam a Cambodia Indonesia Lao PDR Malaysia Myanmar Philippines Singapore Thailand Viet Nam Cook Islands Fiji, Rep. of Kiribati Nauru Palau Papua New Guinea Samoa Solomon Islands Timor-Leste Tonga Tuvalu Vanuatu Australia Japan New Zealand Sources: Country sources, ADB staff estimates using CEIC data.

10 ECONOMY AND OUTPUT 165 Table 2.5 Industry Value Added (percent of total value added) Afghanistan Armenia Azerbaijan Georgia Kazakhstan Kyrgyz Republic Pakistan Tajikistan Turkmenistan Uzbekistan REGIONAL TABLES China, People s Rep. of Hong Kong, China Korea, Rep. of Mongolia Taipei,China Bangladesh Bhutan India Maldives Nepal Sri Lanka Brunei Darussalam a Cambodia Indonesia Lao PDR Malaysia Myanmar Philippines Singapore Thailand Viet Nam Cook Islands Fiji, Rep. of Kiribati Nauru Palau Papua New Guinea Samoa Solomon Islands Timor-Leste Tonga Tuvalu Vanuatu Australia Japan New Zealand Sources: Country sources, ADB staff estimates using CEIC data.

11 166 ECONOMY AND OUTPUT Table 2.6 Services Value Added (percent of total value added) Afghanistan Armenia Azerbaijan Georgia Kazakhstan Kyrgyz Republic Pakistan Tajikistan Turkmenistan Uzbekistan China, People s Rep. of Hong Kong, China Korea, Rep. of Mongolia Taipei,China Bangladesh Bhutan India Maldives Nepal Sri Lanka Brunei Darussalam a Cambodia Indonesia Lao PDR Malaysia Myanmar Philippines Singapore Thailand Viet Nam Cook Islands Fiji, Rep. of Kiribati Nauru Palau Papua New Guinea Samoa Solomon Islands Timor-Leste Tonga Tuvalu Vanuatu Australia Japan New Zealand Sources: Country sources, ADB staff estimates using CEIC data.

12 ECONOMY AND OUTPUT 167 Table 2.7 Private Consumption Expenditure (percent of GDP) Afghanistan Armenia Azerbaijan Georgia Kazakhstan Kyrgyz Republic Pakistan Tajikistan Turkmenistan Uzbekistan REGIONAL TABLES China, People s Rep. of Hong Kong, China Korea, Rep. of Mongolia Taipei,China Bangladesh Bhutan India Maldives Nepal Sri Lanka Brunei Darussalam a Cambodia Indonesia Lao PDR Malaysia Myanmar Philippines Singapore Thailand Viet Nam Cook Islands Fiji, Rep. of Kiribati Palau Papua New Guinea Samoa Solomon Islands Timor-Leste Tonga Tuvalu Vanuatu Australia Japan New Zealand Sources: Country sources, ADB staff estimates using CEIC data.

13 168 ECONOMY AND OUTPUT Table 2.8 Government Consumption Expenditure (percent of GDP) Afghanistan Armenia Azerbaijan Georgia Kazakhstan Kyrgyz Republic Pakistan Tajikistan Turkmenistan Uzbekistan China, People s Rep. of Hong Kong, China Korea, Rep. of Mongolia Taipei,China Bangladesh Bhutan India Maldives Nepal Sri Lanka Brunei Darussalam a Cambodia Indonesia Lao PDR Malaysia Myanmar Philippines Singapore Thailand Viet Nam Cook Islands Fiji, Rep. of Kiribati Palau Papua New Guinea Samoa Solomon Islands Timor-Leste Tonga Tuvalu Vanuatu Australia Japan New Zealand Sources: Country sources, ADB staff estimates using CEIC data, UN Statistics Division (UN 2011).

14 ECONOMY AND OUTPUT 169 Table 2.9 Gross Domestic Capital Formation (percent of GDP) Afghanistan Armenia Azerbaijan Georgia Kazakhstan Kyrgyz Republic Pakistan Tajikistan Turkmenistan Uzbekistan REGIONAL TABLES China, People s Rep. of Hong Kong, China Korea, Rep. of Mongolia Taipei,China Bangladesh Bhutan India Maldives Nepal Sri Lanka Brunei Darussalam a Cambodia Indonesia Lao PDR Malaysia Myanmar Philippines Singapore Thailand Viet Nam Cook Islands Fiji, Rep. of Kiribati Palau Papua New Guinea Samoa Solomon Islands Timor-Leste Tonga Tuvalu Vanuatu Australia Japan New Zealand Sources: Country sources, ADB staff estimates using CEIC data, UN Statistics Division (UN 2011).

15 170 ECONOMY AND OUTPUT Table 2.10 Exports of Goods and Services (percent of GDP) Afghanistan Armenia Azerbaijan Georgia Kazakhstan Kyrgyz Republic Pakistan Tajikistan Turkmenistan Uzbekistan China, People s Rep. of Hong Kong, China Korea, Rep. of Mongolia Taipei,China Bangladesh Bhutan India Maldives Nepal Sri Lanka Brunei Darussalam a Cambodia Indonesia Lao PDR Malaysia Myanmar Philippines Singapore Thailand Viet Nam Cook Islands Fiji, Rep. of Kiribati Palau Papua New Guinea Samoa Solomon Islands Timor-Leste Tonga Tuvalu Vanuatu Australia Japan New Zealand Sources: Country sources, ADB staff estimates using CEIC data.

16 ECONOMY AND OUTPUT 171 Table 2.11 Imports of Goods and Services (percent of GDP) Afghanistan Armenia Azerbaijan Georgia Kazakhstan Kyrgyz Republic Pakistan Tajikistan Turkmenistan Uzbekistan REGIONAL TABLES China, People s Rep. of Hong Kong, China Korea, Rep. of Mongolia Taipei,China Bangladesh Bhutan India Maldives Nepal Sri Lanka Brunei Darussalam a Cambodia Indonesia Lao PDR Malaysia Myanmar Philippines Singapore Thailand Viet Nam Cook Islands Fiji, Rep. of Kiribati Palau Papua New Guinea Samoa Solomon Islands Timor-Leste Tonga Tuvalu Vanuatu Australia Japan New Zealand Sources: Country sources, ADB staff estimates using CEIC data.