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JAPANESE CRISIS WILL HAVE LIMITED REGIONAL IMPACT, SAYS ECONOMIST
Bernama – Thu, Mar 17, 2011 2:56 PM MYT
KUALA LUMPUR, March 17 (Bernama) -- The Japanese crisis in the wake of the
recent earthquake and tsunami, will have limited impact on the region, including
Malaysia as it''s not the driver for Asia''s growth, says an economist.
"Although Japan is a source of investment, the impact following the fallout
will not be that significant," said Justin Wood, Economist Corporate Network''s
director for South-east Asia, in his presentation on the "Outlook For Asia" at
the Regional Strategic Forecast Meeting, here today.
On the contrary, the unrest in Middle East is more of a concern and is a
significant risk because of the impact it will have on oil prices, he said.
He also believes that the current fragile condition of Japan, the world''s
third largest economy, will not translate into a big impact on world economy as
it relies on an export-led growth and it is not seen as the growth engine of
Asia.
On Malaysia''s growth, he said the country''s economy is expected to move on
to a more stable growth from 2011 to 2015 with an average annual gross domestic
product growth of 5.1 per cent.--BERNAMA
Source:http://my.news.yahoo.com
Japan quake: Economic impact felt across Asia
It is almost a week since the deadly tsunami and earthquake hit northeast Japan, and the economic effects are starting to be felt across Asia.
While efforts to deal with the disaster continue, analysts are starting to look at the impact on various sectors and industries.
Some countries that export energy and raw materials could see a surge in demand from Japan.
But others that rely on Japan for manufacturing components will be bracing themselves for shortages in supply.
Source/read more at:
Mahindra: Japan crisis to impact parts supply
Mahindra & Mahindra Ltd. expects the crisis in Japan to hit supply of auto parts to its majority owned South Korean unit, Ssangyong Motor Co., in the short term, reports The Wall Street Journal.However, Mahindra itself won’t face any impact as it doesn’t buy parts from Japan, Pawan Goenka, president of automotive and farm equipment business at Mahindra, told Dow Jones Newswires Thursday.
“Ssangyong sources a chunk of components from Japan and there will be an impact on that in March,” said Goenka, who has been appointed as the South Korean auto maker’s new chairman. He didn’t specify what components Ssangyong buys from Japan.
Mahindra, India’s biggest sport-utility vehicle maker by sales, owns a 70.03% stake in Ssangyong.
Japan has been grappling with a series of disasters after it was rattled by a 9.0-magnitude earthquake on March 11, its strongest ever, followed by a tsunami and radiation leaks from a nuclear power plant.
The events, apart from claiming thousands of lives, have forced companies in several sectors to halt manufacturing activity to cope with damaged facilities and planned power outages. Auto makers such as Toyota Motor Corp., Honda Motor Co., Nissan Motor Co. and Suzuki Motor Corp. have stopped production at their factories since Monday.
Click here to read the full story.
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HIGHLIGHTS NATURAL DISASTER
• Japan’s earthquake and tsunami is an enormous humantragedy.
However, the economic impact is more limited.
• The directly affected area is8% of Japan’s economy, but
there will be knock on effectsin other parts of Japan.
• The disaster has led TD Economics to cut Japan’s real GDP forecast for 2011 from
1.9% to 1.4%.
• However, rebuilding will add to economic growth, lifting the real GDP forecast for 2012
from 1.6% to 2.0%.
• The financial impact of the natural disaster has provenlimited, outside of Japanese
equities.
• The fiscal cost of rebuilding will not create a sovereign debt problem for Japan.
• The near-term weakness in Japan will have a limited impact on the world economy, or the
economies o
THE ECONOMIC IMPACT OF JAPAN’S
In the wake of Japan’s earthquake and tsunami, TD Economics has been receiving many requests for an economic assessment of the fallout on Japan, the United
States, Canada and the global economy. To be honest, it is still very early to tell
the full economic ramifications, but we can outline some of the implications. The
economics of natural disasters is always difficult to write about, as we are talking
about an enormous tragedy, which has killed thousands and has created untold human hardship. This perspective should never be lost. This is why it seems highly
insensitive to write that the unemotional, rational economic facts suggest that while
the disaster will have a significant impact on the Japan’s economy in the near term,
the economy should bounce back in the second half of this year. Moreover, the
impact on the global economy will be very limited.
Assessing the impact on Japan
In terms of the impact on Japan, natural disasters have three key dimensions.
First, there is the immediate devastation. The destruction of previously built
structures or purchased plant and equipment do not show up in the add-up for real
GDP. However, economic activity is depressed by the disruption to production and
spending in the region. The earthquake and tsunami have battered an area that constitutes roughly 8% of
the Japanese economy.
And, there are knockon effects on other areas. For example, the loss of electricity generation at several
nuclear reactors will dampen activity in other parts of the country for some time.
Production supply-chains and/or transportation of goods and services could also be disrupted.
So, the disaster will have a significant impact on Japan’s economy this year,
with the possibility of creating a contraction
in March and perhaps through the second quarter of the year.
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