26/11/2015

Asian Development Outlook 2015 Update:

Enabling Women, Energizing Asia

Joseph E. Zveglich, Jr.
Director, Macroeconomic Research
Asian Development Bank

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.

26/11/2015

Key messages
Developing Asias growth downgraded to 5.8% this
year and 6.0% in 2016
Moderating prospects for PRC and India and delayed
recovery in industrial countries weigh on the outlook
Inflation pressures further easing partly due to lower
global commodity prices
Risks have increased (e.g., capital flow reversal,
currency depreciation), but still manageable
Special theme: Greater womens participation in
economic activities can boost income by up to 30%
3

Economic outlook:
Developing Asia facing headwinds

f: forecast
4

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yet still contributing the most to global growth

Percentage contributions to global GDP growth

Asia continues to account for about 60% of global

growth; still fastest-growing region
5

Regional and global factors

weigh on growth
Moderating prospects in the PRC and India
Delayed recovery in industrial countries
GDP growth (%)

Major industrial economies

United States
Euro area
Japan

2015
ADO
Update
2015

2016
ADO
Update
2015

2.2

1.9

2.4

2.3

3.2
1.1
1.1

2.6
1.5
0.7

3.0
1.4
1.7

2.9
1.6
1.4

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Large variations across subregions

f: forecast
7

PRC growth somewhat lower;

projected to average 6.8% in 2015
Fixed asset investment growth

Export and import growth

Growth in retail sales and industry value added

Stock market (Shanghai Stock Exchange: A Share)

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Indias growth at 7.4% this year;

below earlier forecasts
Fixed investment

Slower than expected

implementation of key
structural reforms
Weaker than projected growth
in advanced economies
Flagging global trade
Export growth

Investment projects dropped

ASEAN growth flat at 4.4% in 2015;

pickup delayed to next year
GDP growth, Southest Asia (%)
7

2014

2015f

2016f

6
5
4

3
2
1
0
ASEAN

INO

THA

PHI

MAL

SIN

VIE

f: forecast
ASEAN=Association of Southeast Asian Nations, INO=Indonesia, MAL=Malaysia, PHI=Philippines, SIN=Singapore,
THA=Thailand, VIE=Viet Nam
10

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Soft global commodity prices

Sources: World Bank Pinksheets; Bloomberg

11

are easing inflation further

f: forecast
12

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Key risks to the outlook

Impact of geopolitical conflicts on oil prices
Euro area debt crisis receded, but not resolved
Commodity exporters coping with low prices and
PRC moderation

Capital flows and US monetary policy

Strong dollar effect on foreign currency debt
Risks heightened but still manageable
13

Capital flow reversals

Capital flows have been
receding since Q2 2014

Capital flows to selected Asian economies

Monetary policy dilemma

between financial sector
stabilization and demand
stimulation
Macroprudential policy
provides scope for
monetary policy
independence

Note: Emerging Asia consists of the People's Republic of China; Hong Kong,
China; India; Indonesia; Republic of Korea; Malaysia; Philippines; Singapore;
Taipei,China; Thailand; and Viet Nam.

14

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Strong dollar raises foreign debt burden

US dollar versus regional currencies

Depreciation poses a threat to Asian firms with large,

short-term foreign debt but little foreign revenues
Improving domestic financial systems can mitigate risks
15

but external debt indicators

sound for most economies

BAN=Bangladesh; CAM=Cambodia; IND=India; INO=Indonesia; KAZ=Kazakhstan; KOR=Rep. of Korea; LAO=Lao PDR; MAL=Malaysia;
MYA=Myanmar; PAK=Pakistan; PHI=Philippines; PRC=Peoples Rep. of China; SRI=Sri Lanka; TAP=Taipei,China; THA=Thailand; VIE=Viet Nam
Foreign liabilities / foreign assets refer to banking institutions, deposit money banks, and other depository corporations.
16

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Special theme

ENABLING WOMEN, ENERGIZING ASIA

17

Asia closing gender gaps in

education and health

18

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but gap in labor force participation

widening
Male-female labor force participation gap (pp)

Percentage points

32

29

26

23

20
1990

1994

1998

2002

2006

2010

Note: Gender gap is male minus female labor force participation rates.
Source: ILO. International Labour Organization. Key Indicators of the Labour Market.

19

and wage gap persists

.5

Male-female wage gap (% male wage)

-.5

-1

9
10
GDP per worker (in logarithm)

11

Sources: ADB estimates using data from the International Labour Organization. Key Indicators of the Labor
Market online database; CEIC Data Company; World Bank. World Development Indicators online database
(all accessed 4 September 2015)

20

10

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Factors inhibiting womens workforce entry

Cultural and social norms
Legal and institutional frameworks
Access to economic opportunities

Source: World Values Survey Association. World Values Survey Wave 6: 2010
2014. www. worldvaluessurvey.org ; International Labour Organization. Key
Indicators of the Labour Market.

Source: World Bank. Women, Business and the Law 2016

database, http://wbl.worldbank.org/data

21

Eliminating gender inequality can increase

per capita income by over 30%
With a complete elimination of inequality:
Model simulation takes into account tradeoff
between paid work and responsibilities at home

Per capita income rises by 30% in a generation in a

hypothetical gender-equality economy
Effect on aggregate income is smaller because the
interventions tend to reduce fertility rates
22

11

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Policy options to enable women

Provide better education and skills and vocational training
to match labor market needs
Remove legal impediments to gender equity, lift constraints
on entrepreneurship, expand ICT access, ensure fair
compensation
Improve information on available employment resources
and jobs and encourage parental leave, child care, and
flexible work arrangement options
Increase womens mobility and securitywhich inhibit
both higher education and training attainment and labor
force participationthrough family-friendly infrastructure
23

Key messages
Developing Asias growth downgraded to 5.8% this
year and 6.0% in 2016
Moderating prospects for PRC and India and delayed
recovery in industrial countries weigh on the outlook
Inflation pressures further easing partly due to lower
global commodity prices
Risks have increased (e.g., capital flow reversal,
currency depreciation), but still manageable
Special theme: Greater womens participation in
economic activities can boost income by up to 30%
24

12