In late July, typhoon Saola landed on the shores of China, Taiwan, and the Philippines, injuring thousands of civilians and destroying hundreds of homes and businesses. Less than one month later, typhoon Libra caused further devastation in the region, leading to millions of dollars in damage.
Although the immediate impact of the storms is apparent, what type of influence will the typhoons have on Asia Pacific’s economic recovery on a long-term basis? Will regional trade weaken as a result of crop damage? Will businesses affected by the storms be forced to lay off workers? Or, will economic progress continue at a steady pace this fall, just as it has throughout 2012?
While it may be too early to fully comprehend the impact the typhoons have had on the region’s economy, the following statistics do provide some indications.
In early September, the Reserve Bank of Australia’s decision to retain the nation’s target cash rate at 3.50 percent for the fourth consecutive month coincided with a majority of economists’ expectations. Earlier this year, the Bank lowered the rate considerably, from 4.25 to 3.75 percent in May and from 3.75 to 3.50 percent in June. Despite such recent decreases, there are currently no signs that the rate will be lowered any further this fall. In fact, due to Europe’s debt crisis and the United States’ sluggish job growth, some economists believe the rate will remain unchanged until 2013.
From August 2011 to August 2012, national retail sales rose by 13.2 percent, according to data recently released by the National Bureau of Statistics of China. Total retail sales were measured at CNY 1.67 billion in August, the highest monthly total since May. Most of the nation’s spending – approximately CNY 1.45 billion – occurred in urban settings. Throughout the last 12 months, urban spending has risen by 13.1 percent; during that same time frame, rural spending has upturned considerably as well, rising by 14.3 percent. In addition, clothing, household electronics, and automobile sales have all increased since August 2011, by 21.1, 12.1, and 2.4 percent, respectively.
After a slight decline in July, Japan’s consumer confidence augmented in August, rising from 39.7 to 40.5, which exceeded some economists’ projections. Each of the index’s sub-indices – overall livelihood, income growth, employment, and willingness to buy durable goods – also increased last month, climbing to 40.7, 39.6, 38.7, and 42.8, respectively. August was the first month since March in which each sub-index has risen on a month-to-month basis. Throughout 2012, consumer confidence has only increased marginally; there is presently no indication that confidence will improve considerably this fall or winter, as regional economic conditions remain unstable.
For the second straight month, South Korea’s national unemployment rate was measured at 3.1 percent in August, as the country’s labor force participation rate dropped to its lowest measurement since March, at 61.5 percent. 24.8 million South Koreans were employed last month, a 1.5 percent increase when compared to August 2011’s figures. In the meantime, national joblessness fell from August 2011 to August 2012, dropping by 3.9 percent. In all, 764,000 residents were without work last month, the lowest monthly total of 2012. Since February, Korea’s unemployment rate has declined by 0.6 percent, according to the Korean Statistical Information Service.
According to National Statistics Taiwan, the nation’s Consumer Price Index has risen by 3.4 percent since August 2011, the largest annual increase recorded in 2012. The upsurge was a direct result of the country’s recent typhoons, Saola and Libra, which destroyed some of the area’s fruit and vegetable crops. Consequently, national vegetable and fruit prices rose substantially last month, when compared to August 2011’s figures, increasing by 57.93 and 20.14 percent, respectively. As the country recovers from the typhoons this fall, many economists believe consumer prices will remain high throughout the coming months. The annual inflation rate is currently 1.5 percent higher than the Taiwanese government’s full-year inflation target of 1.93 percent.