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Outlook for Emerging Asia-Pacific Countries Holds Promise

Outlook for Emerging Asia-Pacific Countries Holds Promise

Sustained by declining oil prices and a United States economy that many say at the very least is recovering, if not faltering, the outlook for many emerging economies in Asia-Pacific looks bright.  While countries like Indonesia, Malaysia, Thailand, and Vietnam continue to benefit from the gain in oil prices; those countries will experience an offset to this benefit because of a reduction in exports and a decline in confidence by investors.  This is due, in part, to the lack of confidence many continue to have in leading economies such as China and Japan.  But while these leading economies may be struggling, that struggle is the very thing that gives industry experts such confidence in emerging Asian markets.

 

Governments who are focused on policies that promote innovation and foreign trade through cooperation with foreign governments will be a main factor of success.  The promotion of exportation of products such as raw materials and capital goods will be a good indication of the improved trade climate in the Asia-Pacific region.  Emerging economies in Asia-Pacific are primary importers of oil so they will benefit greatly from declining oil prices, as will consumers who will reap the savings of the lower cost of fuel.  This will increase the amount of disposable income that consumers have, thus promoting spending on other goods and services, strengthening the economy.

 

While Indonesia continues to implement policies that promote the development of their infrastructure, the manufacturing industry did not fare well in the last year.  As markets rebound, the scenario in Indonesia will likely change for the better.  Malaysia continues to experience a bright economic future as its relationship with trading partners, including the United States, urge growth in the manufacturing industry.  The 2015 budget included strong incentives for private sector management and manufacturing, encouraging high-quality investment into both industries.

 

Both Thailand and Vietnam will experience notable growth in 2015 and beyond.  While Thailand had an economic slowdown for much of 2014, it rebounds this year as its political environment improves and export demand increases.  The government in Thailand has made significant strides to completely overhaul the financial sector due to the problems of non-performing loans.  This, combined with the positive outlook for construction and real estate industries, shows a promising year for the country.

Overall, these emerging nations face significant and complicated challenges but the majority of these markets will come out ahead of most other Asia-Pacific countries.  Driven by strong market demand, investor confidence, and higher domestic demand; these countries will come out strong than ever.

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