Asia Pacific’s economic recovery remains sluggish

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Throughout the first half of 2012, Asia Pacific’s economic recovery has remained slow but steady. Inflation rates have begun to decrease. National unemployment is dropping, and consumer and business confidence levels are rising within many nations.

However, there is no question that the region’s recovery is far from complete. After all, unemployment was still well above average in May. Business and consumer confidence was lower than usual. And, importation and exportation was, yet again, considerably low.

But, were there any indicators in June that suggest progress is still occurring? Did unemployment and inflation decline? Are businesses and consumers more confident now than they were at the beginning of the year?

According to the National Bureau of Statistics of China, domestic producer prices dropped by 2.1 percent from June 2011 to June 2012, the largest year-to-year decrease since 2009. The sharp decline marked the fourth consecutive month in which year-to-year producer prices have diminished. In fact, five of China’s Producer Price Index’s six sub-indices fell from June 2011 to June 2012, including fuel and power and raw materials, which declined by 1.6 and three percent, respectively. In addition, China’s purchasing prices plummeted from June 2011 to June 2012 as well, dropping by 2.5 percent, another sign of current, national deflation.

From May to June, national consumer confidence figures declined marginally, falling from 40.7 to 40.4, according to the Economic and Social Research Institute. The institute also revealed that two of the nation’s four consumer confidence sub-indices – income growth and employment – waned from May to June, dropping by 0.4 and 1.3 basis points, respectively. Yet, the index’s overall livelihood sub-index remained unchanged, at 41.3, while the willingness to buy durable goods sub-index rose from 42.2 to 42.5, a sign that household purchasing of automobiles, homes, and properties is beginning to uptick, despite weakened consumer sentiment. As national income remains below average, many global economists anticipate Japan’s consumer confidence will continue to fall this summer.

South Korea:
For the second straight month, South Korea’s national unemployment rate measured at 3.2 percent in June, as 823,000 residents were without work. According to the Korean Statistical Information Service, 24.6 million South Koreans were employed on a part-time or full-time basis in June, a decrease of approximately 500,000, when compared to May’s employment data. Consequently, the country’s participation rate remained below average last month, falling from 61.5 to 61.3. Although South Korea’s employment figures are currently lower than usual, the country has reported steady job growth since the beginning of the year; in fact, as recently as February, the national jobless rate was 3.7 percent.

In early July, the National Statistics Taiwan released the nation’s latest Consumer Price Index figures, revealing that consumer prices rose by 1.8 percent from June 2011 to June 2012. According to the data, food, clothing, and housing prices all increased throughout the past year as well, rising by 4.4, 2.1, and 1.1 percent, respectively. Year-to-year vegetable and fruit prices also augmented considerably last month, by 30.5 and 4.2 percent, respectively, as a result of Tropical Storm Talim’s heavy rainfall, which flooded some of the region’s crops. Since February, year-to-year inflation has not risen above two percent – and there are presently no signs that the trend will change prior to the end of 2012.

For the first month since March, Vietnam’s monthly trade balance contracted in June, decreasing from a deficit of $527 million to a deficit of $150 million – and exceeding a majority of economists’ projections that the deficit would increase, by as much as $30 million. According to the General Statistics Office, total exports upturned by 15.2 percent from May to June, rising to $9.75 billion, while importation dropped from $10.2 billion to $9.9 billion. Furthermore, coffee, crude oil, and electronic exports all increased substantially from June 2011 to June 2012, by 122.9, 82.6, and 88.1 percent, respectively. Nonetheless, domestic sector exports and imports dropped on a year-to-year basis in June, by 12.6 and 2.9 percent, indicating that economic growth still remained sluggish last month.