Asian economies to struggle on weak export demand

The outlook for emerging Asia has dimmed further this year on weak demand for exports, although growth in India is expected to accelerate into 2015 even as China is held back in part by a slowing property market, Reuters polls showed.
China and India have been stung by the West's slow recovery from the Great Recession and, adding to the problem, both countries have struggled to implement reforms at home to boost productivity and consumer spending.
But signs of stabilisation have emerged in China, the world's second-largest economy, which grew by a slightly-faster-than-expected annual 7.5 percent in April-June, thanks to a raft of government stimulus measures.
Chinese manufacturing expanded at its fastest pace in 18 months in July, according to a preliminary HSBC survey of purchasing managers on Thursday.
However, economists in the Reuters survey conducted from July 17-23 were wary about pushing growth forecasts much higher. They now expect the Chinese economy to grow 7.4 percent in 2014, a modest increase from the 7.3 percent predicted in April, according to 44 respondents.
They expect growth to slow to 7.2 percent next year. That underlines the limited effect that government stimulus measures have had so far and reflects worries that a property market slump could worsen and hurt the broader economy.
Chinese exports rose 7.2 percent in June from a year before, lower than expected. They were up only about 0.9 percent in the first half compared with a year earlier, compared with year-on-year growth of close to 10 percent in January to June 2013.
"The mini-stimulus measures have helped to support growth in the second quarter but we see some downside risks stemming from a property market correction due to oversupply and uncertain external demand," said Jian Chang, an economist at Barclays in Hong Kong.
Economists in the poll also cut 2014 growth forecasts for India, Indonesia, the Philippines, South Korea and Thailand while Australia and Malaysia were predicted to expand at a slightly faster pace.
The forecast for Thailand was cut the most after months of political turmoil that led to a military coup in May, as well as the continuing weakness of exports. Its economy is expected to grow by just 1.8 percent in 2014, down from the 2.6 percent forecast in April.