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Asia, Article: Asia 2016 Forecasts: Managing Downside Risks
By
Mark Canlas
, head of Sovereign and Industry Team in the bank’s
Risk Management Unit, BDO Unibank, The Philippines
By now, forecasts for 2016 and 2017 are out. But, before we celebrate a substantive acceleration in
Asia’s
projected growth (excluding China), what did we fail to see in the two years and how do we impute these
failures to improve our management of downside risks?
Using
the International Monetary Fund’s
(IMF) World Economic Outlook released in October 2013,
forecast for 2014 was more or less accurate providing optimism for October 2015 projections for 2016.
The largest unpredicted downside in Asia was Japan, which was forecasted to grow by 0.9% but
registered a 0.1% contraction. China and ASEAN 5’s actual performance was close to forecasts.
However, the forecast for 2015 made two years prior was significantly lower than forecasted 3.8% global
Gross Domestic Product (GDP) growth at 3.1%. Aside from larger cuts in forecasts for advanced
economies, China (7.1% to 6.8%) and Japan (0.8% to 0.6%) suffer substantive moderation.
IAFEI Quarterly | Issue 31 | 19