Asian Development Outlook 2013 Update

India, Indonesia, and Philippines Outlook

Joseph E. Zveglich, Jr.

Assistant Chief Economist Asian Development Bank Osaka and Tokyo OctoberNovember 2013

The views expressed in this document are those of the author and do not necessarily reflect the views and policies of the Asian Development Bank or its Board of Governors or the governments they represent.

Outlook for India, Indonesia, and Philippines

Tapering talk particularly felt in India and Indonesia

Change in local currency unit/$
Brazil Russian Federation India PRC South Africa Indonesia -20 -10 0 10 Week of 22 MayWeek of 28 Aug Week of 28 AugWeek of 25 Sep

Change in main stock index

Brazil Russian Federation India PRC South Africa Indonesia -30 -15 0 15 Week of 22 MayWeek of 28 Aug Week of 28 AugWeek of 25 Sep

But Indias problems are mainly internal

Supply-side contributions to growth, India
Agriculture Percentage points 12 10 8 6 4 2 0 -2 Q1 2006 Industry Services GDP

Q1 2007

Q1 2008

Q1 2009

Q1 2010

Q1 2011

Q1 2012

Q1 2013

holding back its growth prospects

% 10 8 6.2 6 4 2 0 2010 f = forecast
6

Indias GDP growth, 20102014

9.3 ADO 2013 ADO 2013 Update

6.0 5.0 4.7

6.5 5.7

2011

2012

2013f

2014f

but some progress containing inflation

Inflation
% 24 20 16 12 8 4 0 -4 Core Food Overall

Investment moderating in Indonesia.

Demand-side contributions to growth, Indonesia
Private consumption Net exports Percentage points 9 Government consumption Statistical discrepancy Investment GDP

6.1
6

6.3

6.5

6.3 6.5

6.1 5.9

-3 H12010 H2 H12011 H2 H12012 H2 H12013

policies to promote stability slowing growth

% 8 6.2 6

Indonesias GDP growth, 20102014

ADO 2013 6.5 6.2 6.4 5.7 ADO 2013 Update 6.6 6.0

0 2010 f = forecast
9

2011

2012

2013f

2014f

as inflation spiked on fuel price rises

% 10 Bank Indonesia rate 8 Inflation rate

Broad-based demand supporting Philippines growth

Percentage points
12

Demand-side contributions to growth, Philippines

-6

H12010

H2

H12011

H2

H12012

H2

H12013

Statistical discrepancy Investment Personal consumption

Net exports Government consumption GDP growth

surpassing earlier expectations

% 8

Philippines GDP growth, 20102014

7.6 6.8 ADO 2013 7.0 6.0 ADO 2013 Update 6.1

5.9

3.6

0 2010 f = forecast
12

2011

2012

2013f

2014f

with inflation remaining on target

Contributions to Inflation, Philippines
Percentage points 6

0 Jan 2011

Jul

Jan 2012

Jul

Jan 2013

Aug

Food and non-alcoholic beverage

Nonfood

Overall

13

Opportunities

14

Ease of doing business index

Rank 1

175 IND INO PHI MAL 2007 2013 THA KOR SIN

IND = India, INO = Indonesia, PHI = Philippines, MAL = Malaysia, THA = Thailand, KOR = Republic of Korea, SIN = Singapore Note: Rank : 1=easiest to 175=most difficult

15

Investment
% of GDP 40 30 20 10 0 IND INO PHI MAL 2000 2012 THA KOR SIN

IND = India, INO = Indonesia, PHI = Philippines, MAL = Malaysia, THA = Thailand, KOR = Republic of Korea, SIN = Singapore

16

Merchandise Exports
India
$ billion 350 300 40 250 200 150 100 10 50 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 30

Indonesia

Philippines

India
% of GDP 50

Indonesia

Philippines

20

Note: Fiscal year data for India.

17

Top 5 export destinations, 2012

India Destination United States United Arab Emirates People's Republic of China Singapore Hong Kong, China % of total 12.8 12.4 5.1 4.7 4.1 Indonesia Destination Japan People's Republic of China Singapore Republic of Korea United States % of total 15.9 11.4 9.0 7.9 7.8 Philippines Destination Japan United States People's Republic of China Singapore Hong Kong, China % of total 19.0 14.2 11.8 9.4 9.2

18

Top 5 export products, 2012

India Product
Petroleum products Non-metallic mineral manufactures Misc. manufactures, n.e.s. Textile, yarn, fabric, etc. Clothing and accessories

Indonesia % of total
18.6 8.6 8.1 5.3 4.8

Philippines % of total
13.8 10.8 10.6 8.8 4.2

Product
Coal, coke, briquettes Gas, natural and manufactured Fixed vegetable, fats and oils Petroleum products Crude rubber

Product
Electrical machinery, apparatus and parts Office machinery Cork and wood manufactures Road vehicles Misc. manufactures, n.e.s.

% of total
36.6 10.6 4.2 3.7 3.6

19

Merchandise Imports
India
$ billion 600 500 400 300 200 100 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Indonesia

Philippines
60 50 40 30 20 10 0 2000

India
% of GDP

Indonesia

Philippines

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Note: Fiscal year data for India.

20

2012

10

Top 5 import sources, 2012

India Source People's Republic of China United Arab Emirates Saudi Arabia Switzerland United States % of total 11.1 7.7 6.7 5.9 4.9 Indonesia Source People's Republic of China Singapore Japan Malaysia Republic of Korea % of total 15.3 13.6 11.9 6.4 6.2 Philippines Source United States People's Republic of China Japan Taipei,China Republic of Korea % of total 11.6 10.9 10.7 7.8 7.2

21

Top 5 import products, 2012

India Product
Petroleum products

Indonesia % of total
31.8

Philippines % of total
20.7

Product
Petroleum products

Product
Electrical machinery, apparatus and parts Petroleum products Road vehicles Office and automatic data processing machines Machinery specialized for particular Industries

% of total
20.5

Gold, non-monetary Non-metallic mineral manufactures Coal, coke, briquettes

10.8 4.8

Iron and steel Electrical machinery, apparatus and parts General industrial machinery and equipment Machinery specialized for particular Industries

6.2 5.3

19.3 5.4

3.3

5.2

5.3

Organic chemicals

2.9

5.1

2.8

22

11