Asia Pacific Consensus Economics

Survey DateDecember 8, 2014

Every month, Consensus Economics surveys over 180 prominent Asia Pacific financial andeconomic forecasters for their estimates of a range of variables, including future growth,inflation, foreign trade and exchange rates. All of the countries listed below are covered andthe reference data, together with analysis and polls on topical issues, is rushed to subscribersby express mail and e-mail. Survey Highlights

Asia Pacific Consensus Forecasts (ISSN: 1351-0967) is published by Consensus Economics Inc.,53 Upper Brook Street, London, W1K 2LT, United KingdomTel: (44 20) 7491 3211 Fax: (44 20) 7409 2331 www.consensuseconomics.com Copyright Consensus Economics Inc. 2014. All rights reserved. The contents of this publication, either in whole or in part, may not be reproduced, stored or transmitted in any form or by any means,electronic, photocopying, digitization or otherwise without the prior written permission of the publisher. The Editor and Consensus Economics Inc., do not guarantee or take any responsibility for theinformation set forth herein, including the accuracy, completeness or timeliness of the forecasts or written analysis.

Editor: Suyin KanAssistant Editor: Robert HuntPublisher: Philip M. Hubbard

ContentsPage

Significant Changes in theConsensus ............................................ 2

Special SurveyQuarterly Forecasts(continued on page 32) ........................ 3Individual Country Forecasts

Australia ............................................. 4China .................................................. 6Hong Kong .......................................... 8India.................................................. 10Indonesia .......................................... 12Japan ................................................ 14Malaysia ........................................... 16New Zealand ..................................... 18Philippines ........................................ 20Singapore ......................................... 22South Korea ...................................... 24Taiwan .............................................. 26Thailand ............................................ 28

Bangladesh, Pakistan,Sri Lanka and Vietnam ...................... 30

Oil Price Forecasts ............................ 30

Foreign Exchange Forecasts ............. 31

Special Survey:Quarterly Forecasts ....................... 32-33

Asia Pacific and WorldEconomic Activity Table .................... 36

Our next issue of Asia Pacific Consensus Forecasts will beavailable at the end of the day on January 15, 2015 and willinclude Forecast Probabilities.

China moved to cut interest rates last month in a sign thatpolicymakers are becoming worried about weakening near-term growth prospects. It was the first rate reduction in morethan two years and commentators have not ruled out thepossibility of further monetary easing, especially in view of thesoft start to Q4. Elsewhere in Asia, Japan's economy is alsostruggling to gain momentum after another poor showing in thethird quarter tipped the country into recession. Premier Aberesponded to the weak GDP data by calling a snap election forDecember 14. Furthermore, he announced that the secondsales tax hike, which was scheduled for October 2015, wouldbe delayed for 18 months. Consequently, 2014 growth pros-pects have worsened for both countries this month.

Quarterly Real GDP Growth (% y-o-y)

In this month's special survey we asked our panellists toprovide us with their quarter-by-quarter forecasts for a rangeof macroeconomic variables, including real GDP growth,inflation, trade balances and short-term interest rates.These quarterly consensus forecasts through to the secondquarter of 2016, can be found on pages 2, 3, 32 and 33.

ConsensusForecasts

Australia

Japan

Indonesia

-6.0-5.0-4.0-3.0-2.0-1.00.01.02.03.04.05.06.07.08.0

Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16

%

DECEMBER 2014

2 Copyright Consensus Economics Inc. 2014

5.85.6

5.54.8

5.1 5.2 5.34.8

5.2

5.6

6.0

6.4

6.8

7.2

Q12013

Q2 Q3 Q4 Q12014

Q2 Q3 Q4 Q12015

Q2 Q3 Q4 Q12016

Q2

SIGNIFICANT CHANGES IN THE CONSENSUS

Singapore GDP Growth Quarterly Forecastsin December 2013, June 2014 and December 2014

Japan GDP Growth Quarterly Forecastsin December 2013, June 2014 and December 2014

Philippines GDP Growth Quarterly Forecastsin December 2013, June 2014 and December 2014

The charts on this page show the evolution of QuarterlyForecast Trends for GDP Growth for six Asia Pacificeconomies. Each chart includes estimates from our surveysin December 2013 (red line), June 2014 (black) and thecurrent December 2014 survey (blue) and also in tabularform on pages 3, 32 and 33. The release of Q3 GDP growthdata provides a clear picture of the regional outlook and hasclearly affected our panels quarterly GDP growth projectionsfor a number of countries over the coming quarters. Theoverall picture appears bleaker than earlier in the year. Thisis particularly true in Japan where the nation currently findsitself in recession after two consecutive quarters of negativegrowth. The economy unexpectedly shrank by 1.2% (y-o-y)in Q3 on the back of a 0.3% contraction in Q2 as consump-tion failed to recover after April's tax hike. A snap election

China GDP Growth Quarterly Forecastsin December 2013, June 2014 and December 2014

December2013

June 2014

June 2014

December2013

%

%

%

Indonesia GDP Growth Quarterly Forecastsin December 2013, June 2014 and December 2014

June 2014December

2013

%

Thailand GDP Growth Quarterly Forecastsin December 2013, June 2014 and December 2014

December 2013

June 2014

December 2014

%

%

(% change y-o-y)

2.0

4.0 3.93.8 3.2

3.6

3.8

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

Q12013

Q2 Q3 Q4 Q12014

Q2 Q3 Q4 Q12015

Q2 Q3 Q4 Q12016

Q2

(% change y-o-y)

(% change y-o-y)

called for later this month adds to the uncertainty and thediscouraging signs shown by the economy have, conse-quently, led to a downgrade in our panels GDP projections.Elsewhere, Thailand has also experienced significant reduc-tions in GDP forecasts as quarterly growth expectations haveweakened compared with the December 2013 and June 2014surveys. This is hardly surprising given the Q3 GDP release,which showed that growth remained low at 0.6% (y-o-y), 1.2%lower than consensus expectations of a 1.8% gain back inJune 2014. In Indonesia, meanwhile, our panel is pessimis-tic about the 2015 outlook following the recent controversialfuel subsidy repeal. GDP growth is now expected to fall below5% (y-o-y) in Q4, and the recovery in 2015 is likely to besomewhat sluggish, with interest rates probably headingupwards as the country battles rising inflationary pressures.

7.2 7.27.1 7.0 7.0

7.1 7.0

6.6

6.8

7.0

7.2

7.4

7.6

7.8

8.0

Q12013

Q2 Q3 Q4 Q12014

Q2 Q3 Q4 Q12015

Q2 Q3 Q4 Q12016

Q2

December 2014

December 2014

December 2014

(% change y-o-y)

June 2014

December 2013 December 2014

June 2014

December 2013

December 2014

5.8

6.36.26.6

6.0

6.26.2

5.0

5.4

5.8

6.2

6.6

7.0

7.4

7.8

Q12013

Q2 Q3 Q4 Q12014

Q2 Q3 Q4 Q12015

Q2 Q3 Q4 Q12016

Q2

(% change y-o-y)

Outturns

Outturns

Outturns Outturns

Outturns

Outturns

2.4

1.5

-0.8

0.2

1.8 1.6 1.5

-1.5-1

-0.50

0.51

1.52

2.53

3.5

Q12013

Q2 Q3 Q4 Q12014

Q2 Q3 Q4 Q12015

Q2 Q3 Q4 Q12016

Q2

3.9 3.7

3.92.0 2.5 3.3 3.4

0.0

1.0

2.0

3.0

4.0

5.0

6.0

Q12013

Q2 Q3 Q4 Q12014

Q2 Q3 Q4 Q12015

Q2 Q3 Q4 Q12016

Q2

(% change y-o-y)

DECEMBER 2014


QUARTERLY FORECASTS

BoP - Balance of Payments GDP - Gross Domestic Productfob - free on board cif - including cost, insurance and freightIMF - International Monetary Fund na - not availableOECD - Organisation for Economic Co-Operation and Developmenty-o-y - year-on-year q-o-q - quarter-on-quarter m-o-m - month-on-month

Measures of GDP, consumption, fixed investment and industrial production are expressed in real(i.e. inflation-adjusted) terms unless otherwise noted. These variables, and most others unless otherwise indicated,are expressed as average percentage changes over the previous year.

All individual country forecasters on pages 4-29 are listed in descending order of their 2014 real GDP estimates.Consensus forecasts are arithmetic averages of the listed individual estimates.

NOTES AND ABBREVIATIONSDECEMBER 2014

In addition to their regular forecasts, country panellists were asked to provide forecasts for individual quarters covering theperiod through the second quarter of 2016. Figures in normal type are official, published data with consensus forecasts basedon the arithmetic averages of our panels' forecasts shown in bold italics. Unless otherwise noted, all definitions correspondto those used on the individual country pages, and figures represent percentage changes over the same quarter of the previousyear. Readers should note that the four quarterly consensus forecasts covering a year may not equate to the annual consensusforecast shown for the same variable on pages 4-29, since the groups of survey respondents may be different, or becauseof rounding.

1 End period

Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2Gross Domestic Product* 3.0 2.9 2.6 1.8 2.7 2.0 2.4 3.3 3.0 2.8 2.7 2.5

Consumer Prices* 5.3 4.3 4.2 3.6 4.9 3.4 3.6 3.6 3.4 3.2 3.5 3.4Unemployment Rate (%) 3.5 3.1 3.1 3.3 3.4 3.3 3.3 3.3 3.4 3.4 3.3 3.4Trade Balance (US$bn) -15.3 -17.7 -16.0 -18.2 -16.0 -20.5 -17.6 -18.4 -17.1 -24.0 -18.0 -19.43-month Interbank Rate, %1 0.4 0.4 0.4 0.4 0.4 0.4 0.5 0.6 0.8 0.9 1.1 1.3

For the majority of countries across Asia, economic activity forthe September quarter proved to be less than upbeat as growthslipped back down. Regional behemoths like China and Indiasaw their expansions moderate to 7.3% (y-o-y) and 5.3%,respectively. Fears about near-term growth prospects promptedBeijing to cut rates last month and in India the authorities arealso under pressure to loosen policy to support growth. In other

Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2

Gross Domestic Product* 7.8 7.7 7.4 7.5 7.3 7.2 7.2 7.1 7.0 7.0 7.1 7.0

Industrial Production* 10.1 10.0 8.7 8.9 8.0 7.9 8.0 7.8 7.7 7.8 8.0 8.0

Consumer Prices (Nationwide)* 2.8 2.9 2.3 2.2 2.0 1.8 2.0 2.1 2.1 2.1 2.5 2.7Trade Balance (US$bn) 61.5 90.5 16.5 85.9 128.2 107.7 51.4 93.0 118.0 117.9 34.3 79.9

China

Australia

Hong Kong

* % change over same quarter ofprevious year

*% change over same quarter ofprevious year

* % change over same quarter ofprevious year

2013

2013

2014

2014

2013 2014 2015

2015

2015

parts of the region, Q3 activity slowed in Indonesia, Malaysiaand Thailand, while Japan slipped into a surprise recession,prompting Premier Abe to delay an unpopular sales tax hikeand to call a snap election. However, it was not all bad newson the growth front as GDP surprised on the upside in HongKong, while Taiwan saw its economy grow at its fastest ratein almost two years. Tables continued on pages 32-33.

Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2Gross Domestic Product* 1.9 2.2 3.0 2.7 2.7 2.5 2.2 2.5 2.8 3.0 3.1 3.1Industrial Production* 0.9 1.8 5.0 5.1 3.9 3.3 1.3 2.2 2.8 3.2 3.3 3.3Consumer Prices* 2.2 2.7 2.9 3.0 2.3 2.0 2.2 2.2 2.6 2.8 2.8 2.8Trade Balance (A$bn) -3.1 -0.5 2.0 -4.6 -4.4 -5.2 -3.8 -3.1 -2.4 -1.7 -0.8 0.190-day Dealer Bill Rate, %1 2.6 2.6 2.7 2.7 2.7 2.7 2.7 2.8 2.9 3.1 3.2 3.3

2016

2016

2016


DECEMBER 2014

Quarterly Consensus ForecastsHistorical Data and Forecasts (bold italics) From Survey of

December 8, 2014

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

Gross Domestic 3.0 2.7 2.7 2.5 2.2 2.5 2.8 3.0 3.1 3.1Product*

Consumer 2.9 3.0 2.3 2.0 2.2 2.2 2.6 2.8 2.8 2.8Prices*

Trade Balance 2.0 -4.6 -4.4 -5.2 -3.8 -3.1 -2.4 -1.7 -0.8 0.1(A$bn)

3.3 3.1 2.5 3.2 -5.1 -5.5 na na na na 2.5 2.6 na na na na 6.3 6.13.1 2.7 2.5 2.8 -0.6 1.4 na na 4.3 1.9 2.7 2.8 na na na na 6.0 6.03.1 2.9 2.4 2.4 -4.6 -4.8 2.1 0.8 na na 2.6 2.5 2.6 2.6 na na 6.1 6.33.1 2.9 2.5 2.9 -5.2 -4.5 2.4 0.4 na na 2.6 2.7 2.7 3.0 190 186 6.0 5.83.0 3.3 na na -6.9 -2.8 na na na na 2.5 2.5 na na 190 185 6.3 6.12.9 2.8 2.2 1.9 na na na na 4.1 2.9 2.7 2.6 na na na na 6.0 6.12.9 3.2 2.4 2.5 na na na na 5.0 3.7 2.5 2.6 2.6 3.1 na na 6.0 5.82.8 2.9 2.6 3.4 -0.1 0.8 na na 4.4 1.4 2.6 2.3 na na na na 6.1 6.02.8 2.3 2.5 2.8 -5.2 -2.0 3.5 3.4 na na 2.6 2.4 2.6 2.6 189 180 6.1 6.52.8 2.6 2.5 2.4 -6.0 -7.5 1.1 -1.8 na na 2.6 2.2 2.5 2.9 na na 6.1 6.72.7 2.8 2.5 3.0 -4.5 -2.2 na na na na 2.6 2.5 2.6 2.8 190 180 6.0 6.02.7 2.6 2.5 2.8 -5.2 -12.7 2.9 2.0 3.6 1.9 2.5 2.3 2.5 2.5 191 182 6.0 6.22.7 2.4 2.5 3.2 na na na na 4.0 2.3 2.5 2.4 na na na na 6.1 6.02.7 2.8 2.3 2.8 -4.7 -3.0 2.0 4.0 na na 2.6 2.5 2.7 3.2 197 190 6.1 6.12.7 2.5 2.5 2.7 na na na na na na 2.7 2.7 2.9 3.1 188 na 6.1 5.92.7 2.6 2.5 2.5 -5.4 -5.3 2.7 5.4 na na 2.6 2.5 2.6 2.9 194 194 6.1 6.12.7 2.7 2.5 2.7 -4.0 -3.5 na na na na 2.5 2.0 2.6 2.8 197 185 6.1 6.52.7 2.4 2.4 2.9 -4.0 -2.2 2.1 5.4 4.3 2.7 2.5 2.4 2.6 2.7 193 192 6.1 6.1

2.9 2.8 2.5 2.8 -4.4 -3.8 2.4 2.4 4.3 2.4 2.6 2.5 2.6 2.9 192 186 6.1 6.1

3.1 2.9 2.5 2.9 -4.5 -3.3 4.0 4.5 4.4 2.3 2.6 2.4 2.6 3.1 191 186 6.0 6.03.0 2.9 2.5 2.9 -4.9 -3.3 5.1 5.3 3.8 2.0 2.7 2.6 2.6 3.1 191 187 6.1 6.03.3 3.3 2.6 3.4 -0.1 1.4 3.5 5.4 5.0 3.7 2.7 2.8 2.9 3.2 197 194 6.3 6.72.7 2.3 2.2 1.9 -6.9 -12.7 1.1 -1.8 3.6 1.4 2.5 2.0 2.5 2.5 188 180 6.0 5.80.2 0.3 0.1 0.4 1.9 3.5 0.7 2.6 0.4 0.8 0.1 0.2 0.1 0.2 3 5 0.1 0.2

2.8 2.9 2.7 2.6 6.2 6.13.1 2.5 2.5 2.9 2.6 2.3 6.1 6.2

CitigroupOxford EconomicsANZ GroupCommonwealth BankJP Morgan ChaseEcon Intelligence UnitHSBC AustraliaMoody's AnalyticsMerrill Lynch AustraliaNational Australia BankUBSDeloitte Access EconIHS EconomicsBT Financial GroupMelbourne InstituteQICWestpac Banking CorpBIS Shrapnel

Consensus (Mean)

Last Month's Mean 3 Months Ago HighLowStandard Deviation

Comparison ForecastsIMF (Oct. '14)OECD (Nov. '14)

AUSTRALIA

Government and Background Data

Prime Minister - Mr. Tony Abbott (centre-right Liberal-National coali-tion). Government - The coalition won 90 seats of the 150-seat Houseof Representatives (lower house) and the opposition (Australian Labourparty) secured 55 seats. Next Elections - 2016 (Parliamentary).Nominal GDP - A$1,554.8bn (2013). Population - 23.3mn (mid-year,2013). US$/A$ Exchange Rate - 0.967 (average, 2013).

Historical Data

Economic Forecasters

GrossDomesticProduct

AnnualTotal

YearAverage

Average % Change on Previous Calendar Year

NewHousing

Approvals(thousand

units)

HouseholdConsump-

tion

BusinessInvestment

GrossOperating

Profits

ConsumerPrices

IndustrialProduction

WageCostIndex

Unem-ploymentRate (%)

2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015

*Percentage Change (year-on-year)

Data are for fiscal years beginning in July and ending the followingJune (i.e. 2013 = July 2013 to June 2014, corresponding to FY13/14).**

2015

2010 2011 2012 20132.3 2.7 3.6 2.13.2 3.1 2.5 1.70.0 18.7 15.1 -1.7

11.0 9.3 -4.8 2.84.4 1.1 3.7 1.72.9 3.3 1.8 2.43.4 3.7 3.6 2.9182 154 155 1795.2 5.1 5.2 5.77.0 12.6 -22.2 -9.9

-48.3 -42.4 -64.0 -51.5

-51.1 -47.0 -21.0 -52.55.0 4.5 3.1 2.65.6 3.8 3.3 4.2

* % change on previous yearGross Domestic Product*Household Consumption*Business Investment*Gross Operating Profits*Industrial Production*Consumer Prices*Wage Cost Index*Housing Approvals, 000 unitsUnemployment Rate, %Trade Balance (BoP, A$bn)Current Account (BoP, A$bn)Commonwealth Budget fiscal years, A$bn**90 day Dealer Bill, % (end yr )Yr Govt Bond, % (end yr)

2014 2016

5

DECEMBER 2014

Copyright Consensus Economics Inc. 2014

Most likely rate change mentioned was: None

0.6 -20.9 -52.6 -71.8 na na 2.8 2.9 3.3 3.9-1.2 -2.8 -53.5 -56.9 -32.0 -19.1 2.9 3.4 3.8 4.1

-12.5 -14.7 -54.3 -67.2 na na 2.7 3.1 3.2 3.5-10.0 -2.4 -47.0 -43.0 -40.0 -35.0 2.7 3.1 3.5 3.7-7.0 3.2 -56.2 -50.0 -29.8 -17.1 2.7 2.9 3.6 4.05.3 1.6 -40.7 -39.6 na na na na na na

-11.4 -8.7 -49.0 -44.9 -30.5 -17.9 3.2 3.6 3.2 3.42.3 27.0 -45.0 -33.2 -50.0 -40.0 2.7 2.9 4.2 4.6

-11.9 -19.1 -50.3 -69.1 -35.0 -25.0 2.8 3.0 na na-13.9 -22.6 -51.7 -63.2 -40.0 -30.0 2.5 2.3 3.1 3.3-13.6 -16.6 -49.6 -50.4 -38.7 -33.6 2.6 3.1 3.3 3.7-15.7 -16.3 -56.1 -47.2 na na 2.4 2.4 3.3 3.3-13.2 -21.2 -50.0 -52.7 na na na na na na-11.3 -10.5 -47.0 -48.0 -35.0 -25.0 2.7 3.1 3.3 3.8

na na na na na na 2.8 na 3.5 na-11.0 3.0 -46.9 -32.1 -35.9 -27.6 2.7 3.0 3.8 4.4-11.0 -19.0 -47.0 -53.0 na na 2.2 2.2 3.1 3.4-9.8 2.1 -46.0 -34.6 na na 2.7 3.3 3.7 4.2

-8.5 -8.1 -49.6 -50.4 -36.7 -27.0 2.7 2.9 3.5 3.8

-7.4 -1.7 -50.0 -48.6 -32.0 -21.0-0.4 10.8 -44.7 -41.0 -31.6 -21.65.3 27.0 -40.7 -32.1 -29.8 -17.1 3.2 3.6 4.2 4.6

-15.7 -22.6 -56.2 -71.8 -50.0 -40.0 2.2 2.2 3.1 3.36.3 13.0 4.2 12.3 5.9 7.7 0.2 0.4 0.3 0.4

0

1

2

3

4

5

93 95 97 99 01 03 05 07 09 11 13 15 17 19

Common-wealthBudgetBalance(A$bn)

AUSTRALIA

Real GDP Growth and Inflation

Real GDP (% chg yoy)%

Rates on Survey Date

CurrentAccountBalance(A$bn)

90-dayDealer BillRate (%)

10 YearGovernment

BondYield (%)

Fiscal YearsJuly - June

Goods &Services

TradeBalance

(BoP basis,A$bn)

Annual Total

Major Import Suppliers(% of Total)

Major Export Markets(% of Total)

Direction of Trade 2013

China 36.1Japan 18.0South Korea 7.3India 3.6

China 19.5United States 10.4Japan 7.8Singapore 5.4

2014 2015 2014 2015 FY FY14/15 15/16

End EndMar'15 Dec '15

ConsensusForecasts

End EndMar '15 Dec'15

The panel's estimated average probability of a change in theReserve Bank of Australia's Overnight Cash Rate Target(currently 2.5%) at or before the next monetary policymeeting (February 3, 2015) was:

Likelihood of a RBA Interest Rate Change

%

% probability of:INCREASE NO CHANGE DECREASE

3.5 + 78.1 + 18.5 = 100

2.7% 3.0%

2.2

2.4

2.6

2.8

3.0

2014Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

GDP Growth and Inflation ForecastsConsensus Forecasts from Survey of:

2015 ConsumerPrice InflationForecasts (%)

2015 Real GDPGrowth

Forecasts (%)

%

Annual Growth Rates Dip Below 3%Australias economy grew less than expected during Q3 asannual growth dipped below the 3.0% mark to register 2.7%.And in seasonally adjusted q-o-q terms, real GDP expandedby just 0.3%. Net exports were up 0.8% (q-o-q), performingbetter than in previous quarters, but both private and publicgross fixed capital formation reported falls of 0.5% and 0.2%,respectively. Most worryingly, real gross domestic incomefell for the second consecutive quarter after shrinking by0.4% (q-o-q), which effectively signifies an income reces-sion in the country for the first time since the global financialcrisis. This phenomenon has occurred mainly as a result ofa significant decline in the terms of trade index, which fell by3.5% (q-o-q) in Q3, and by around 8.9% in annual terms. Thedeterioration came on the back of a sharp fall in iron oreprices, owing to a slump in Chinese demand. The ReserveBank of Australia has left the official cash rate unchanged at2.5% throughout this year, but following the recent disap-pointing GDP data release, speculation is mounting that a cutmay be on the way in early 2015. The central bank next meetsin February, with our panel now foreseeing a 18.5% probabil-ity of an interest rate reduction (see box below). Moreover,growth expectations for this year and next have dipped.

On the plus side, October retail sales beat expectations togrow by 0.4% (m-o-m), although this figure was somewhatlower than Septembers revised 1.3% increase. Sales indepartment stores rose by 2.0% (m-o-m) and sales ofhousehold goods rose by 1.4% in the build up to the festiveperiod. Turnover in the retail sector totalled A$23.7bn, risingfor the fifth consecutive month and this helped the weakAustralian dollar post a slight recovery after reaching a four-year low against the US dollar at the beginning of December.

Consumer Prices (% chg yoy)


DECEMBER 2014

HSBC EconomicsJP Morgan ChaseFERIBank of China (HK)Bank of East AsiaChina Int'l Capital CorpHang Seng BankINGNomuraOxford EconomicsBarclays CapitalGoldman Sachs AsiaMoody's AnalyticsEcon Intelligence UnitCitigroupBBVAMorgan Stanley AsiaSociete GeneraleTimetricUBSBofA - Merrill LynchIHS EconomicsDaiwa Capital Markets

Consensus (Mean)


Comparison ForecastsAsian Development Bank (Sep. '14)Chinese Academy of Social Science (Dec. '14)IMF (Oct. '14)OECD (Nov. '14)State Info. Ctr. (Nov. '14)


December 8, 2014

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2


Consumer 2.3 2.2 2.0 1.8 2.0 2.1 2.1 2.1 2.5 2.7Prices*

Trade Balance 16.5 85.9128.2 107.7 51.4 93.0 118.0 117.9 34.3 79.9(US$bn)

Historical Data

ConsumerPrices

(Nationwide)

ProducerPrice Index

for Manufac-tured Goods

MoneySupply

(M2)

RetailSales

(Nominal)


MerchandiseExports

(fob, US$bn)

End Year,% change

FixedAsset

Investment(Nominal)


(Value Addedof Industry)

CHINA


GrossDomesticProduct(Real)

2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015


Government and Background DataPresident - Mr. Xi Jinping. Prime Minister - Mr. Li Keqiang Government -Chinese Communist Party (CCP), which elects a State Council comprisinga premier and ministers. Next Party Elections - A new government will beapproved at the National People's Congress in March 2018. Nominal GDP- Rmb58,667bn (2013). Population - 1.4bn (mid-year 2013). Renminbi/US$Exchange Rate - 6.150 (average, 2013).

2014

Annual Total

* % change on previous year 2010 2011 2012 2013Gross Domestic Product (real)* 10.4 9.3 7.7 7.7Retail Sales (nominal)* 18.3 17.1 14.3 13.1Fixed Asset Inv. (nominal)* 23.8 23.8 20.3 19.6Industrial Production (real)* 15.7 13.9 10.0 9.7(Value Added of Industry)Consumer Prices (Nationwide)* 3.3 5.4 2.6 2.6Producer Price Index for 5.5 6.0 -1.7 -1.9Manufactured Goods*Money Supply (M2), end year* 19.7 13.6 13.8 13.6Merch. Exports (fob, US$bn) 1577.8 1898.4 2048.7 2209.4Merch. Imports (cif, US$bn) 1396.2 1743.5 1818.4 1950.3Trade Balance (fob-cif, US$bn) 181.5 154.9 230.3 259.1Current Account Bal. (US$bn) 237.8 136.1 215.4 182.8General Gov. Budgt. Bal. (Rmb bn) -1050.0 -519.0 -850.0 -1060.01-year Base Lending Rate for 5.8 6.6 6.0 6.0Working Capital (%) (end year)

2015

7.5 7.7 12.8 13.2 19.0 20.0 9.1 9.4 2.4 2.9 -1.5 -0.2 13.5 13.5 2347 25607.4 7.2 11.9 11.6 15.8 15.3 8.3 8.6 2.0 1.5 -1.8 -0.8 12.9 12.7 2361 25207.4 7.2 12.8 13.4 16.6 16.9 8.4 7.8 2.1 2.5 -1.5 1.4 13.6 11.8 2325 25507.4 7.2 12.0 11.5 16.0 16.0 8.5 8.5 2.0 1.8 -1.8 -1.5 12.6 12.0 2331 25067.4 7.0 12.0 11.5 16.0 14.5 8.3 8.7 2.0 2.5 na na 12.5 12.0 2342 25297.4 7.3 12.0 11.5 15.8 14.0 8.5 8.2 2.0 1.4 -1.8 -1.2 13.0 13.0 2351 25627.4 7.3 12.0 12.5 16.5 16.0 9.0 9.0 2.0 2.5 na na 13.0 13.0 2387 25787.4 7.1 13.5 13.5 19.5 19.5 9.6 10.0 2.0 2.0 0.0 1.5 13.5 13.5 2387 26017.4 6.8 12.0 12.2 16.0 14.8 8.4 7.8 2.1 1.9 -1.8 -1.5 13.2 12.5 2340 25277.4 6.5 11.9 11.1 na na 7.4 6.5 2.0 1.6 -1.7 -1.7 11.3 11.1 2348 25077.3 7.0 na na na na 8.3 7.7 2.1 2.0 na na na na na na7.3 7.0 12.0 12.0 15.7 14.1 na na 2.1 2.0 na na 13.0 12.3 2293 23837.3 7.3 12.0 12.0 15.7 14.0 8.4 7.8 2.1 2.2 -1.6 2.0 13.1 12.0 na na7.3 7.0 na na na na 8.5 8.1 2.1 2.3 -1.7 -1.0 13.0 11.1 2334 24937.3 6.9 na na na na 8.3 7.4 2.0 1.9 na na na na 2345 25027.3 7.0 13.5 13.5 17.0 16.5 8.2 7.9 2.1 2.9 0.0 1.0 12.5 11.5 2386 26257.3 7.0 12.0 11.7 16.1 15.8 8.5 8.0 2.0 2.0 -1.6 -1.1 na na na na7.3 6.8 12.0 12.3 16.0 12.6 8.4 7.6 2.0 1.9 -1.8 -1.6 13.0 11.5 2340 24807.3 7.1 12.0 12.0 16.8 16.5 8.6 8.3 2.1 2.6 -1.5 -0.2 13.2 12.7 2343 25417.3 6.8 na na na na na na 2.0 1.5 na na 12.5 12.0 2330 25057.3 7.1 na na na na na na 2.1 2.3 na na 13.3 12.7 2350 24607.3 6.5 11.8 10.6 na na 8.3 7.2 2.0 1.8 -1.7 0.0 12.7 12.3 2337 25227.2 6.9 11.9 11.6 15.5 14.5 8.3 7.7 2.1 1.5 -1.6 -0.3 12.5 11.5 2329 2457

7.3 7.0 12.2 12.1 16.5 15.7 8.5 8.1 2.1 2.1 -1.5 -0.3 12.9 12.2 2345 2520

7.4 7.1 12.2 12.3 16.9 16.5 8.5 8.3 2.1 2.4 -1.3 0.1 13.0 12.2 2345 25257.4 7.1 12.7 13.0 17.5 17.2 8.8 8.7 2.4 2.8 -0.9 0.8 13.1 12.5 2347 25487.5 7.7 13.5 13.5 19.5 20.0 9.6 10.0 2.4 2.9 0.0 2.0 13.6 13.5 2387 26257.2 6.5 11.8 10.6 15.5 12.6 7.4 6.5 2.0 1.4 -1.8 -1.7 11.3 11.1 2293 23830.1 0.3 0.5 0.8 1.2 2.0 0.4 0.8 0.1 0.4 0.6 1.2 0.5 0.7 22 54

7.4 7.4 2.4 3.0

7.3 7.1 11.5 11.3 15.8 15.5 8.4 8.1 2.1 2.0 -1.7 -1.4 12.8 12.6 2336 24537.4 7.1 2.57.3 7.1 2.1 2.67.3 7.0 12.0 12.0 15.5 14.0 8.4 7.8 2.1 2.5 -1.7 -0.5 13.0 13.0 2354 2542

2016

7

DECEMBER 2014


-505

10152025

93 95 97 99 01 03 05 07 09 11 13 15 17 19

2037 2171 310 390 195 199 -1350 -1400 5.4 5.11875 1928 486 591 311 398 -1315 -2071 na na1976 2185 350 365 210 174 -714 -745 5.6 5.61999 2169 332 337 250 245 -1200 -1150 5.3 5.02005 2125 337 404 na na na na na na1985 2055 365 507 na na -1350 -1500 na 5.42106 2275 281 303 na na na na na na2136 2360 251 242 241 254 -797 -801 5.6 5.61995 2103 345 424 216 222 -1309 -1895 5.6 5.41936 2028 412 479 277 270 -1955 -3431 na na

na na na na 332 389 na na 5.4 na1969 1952 324 431 212 266 na na na na

na na na na na na na na 5.6 5.61998 2143 336 350 232 214 -1891 -2040 na na1988 2068 357 434 251 291 na na na na2126 2317 260 308 200 250 -1300 -1430 5.1 5.1

na na na na na na na na 5.4 5.11987 2046 354 433 258 288 -1354 -1651 na na1979 2098 364 444 na na na na na na1951 2010 379 496 302 335 na na na na1992 2077 359 383 237 252 na na na na1975 2111 362 411 357 426 -1095 -949 5.4 5.41993 2137 336 320 250 230 na na 5.6 5.6

2000 2118 345 403 255 277 -1302 -1589 5.4 5.3

2014 2155 331 370 242 246 -1296 -15522055 2227 292 321 214 214 -1315 -13872136 2360 486 591 357 426 -714 -745 5.6 5.61875 1928 251 242 195 174 -1955 -3431 5.1 5.0

62 110 51 82 47 72 361 734 0.2 0.2

1970 2068 367 385 275 285 -1350 -1500 5.6 5.6185 221

1989 2089 364 453 -1350 -1500

1.0

1.5

2.0

2.5

3.0

3.5


7.0

7.1

7.2

7.3

7.4

-90-2050

120190260330400470

93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15


Real GDP (% chg yoy)

CurrentAccountBalance(US$bn)

TradeBalance(fob-cif,US$bn)

MerchandiseImports

(cif, US$bn)

%

CHINA

Annual Total

2014 2015 2014 2015 2014 2015 2014 2015

CurrentAccountBalance

TradeBalance

US$bn

ConsensusForecasts

GeneralGovernmentBudget Bal.

(Rmb bn)

1-year BaseLending Ratefor WorkingCapital (%)

Rate onSurvey Date

End EndMar '15 Dec '15

ConsensusForecasts

Direction of Trade - 2013

Hong Kong 17.4United States 16.7Japan 6.8South Korea 4.1

South Korea 9.4Japan 8.3United States 7.5Germany 4.8



5.6%

Trade and Current Account Balances

GDP Growth and Inflation ForecastsConsensus Forecasts from Survey of:%

2015 Consumer PriceInflation Forecasts

(%) - left scale

2015 Real GDPGrowth

Forecasts (%) -right scale


Beijing Cuts Rates to Support the EconomyOn November 22 the People's Bank of China moved to cut ahost of benchmark interest rates, including the 1-year lendingrate from 6.0% previously to 5.6%. This marked the first ratereduction in more than two years and the move is seen as anattempt by the government to shore up support for theeconomy. With economic activity having slowed to 7.3% (y-o-y) in Q3, last month's rate cut appears to underscoregrowing concern about near-term growth prospects. Whilethe authorities have been keen to emphasize the need toreduce corporate financing costs to support struggling com-panies, there is no denying that recent economic indicatorshave remained lacklustre at best and the move is widelyviewed as an attempt to stimulate growth. Meanwhile, theeconomy potentially faces a weak Q4 performance, judgingby the string of subdued data releases for October. Data forindustrial production and nominal retail sales came in belowexpectations, with the former expanding by 7.7% (y-o-y) andthe latter by 11.5%. Elsewhere, softness in the economy wasreflected in a drop in the official manufacturing PMI, whichslipped from a reading of 50.8 in October to 50.3 last month.On top of this, house prices have fallen on a monthly basisfor the seventh straight month in November, underscoringthe continued slump in the property market. Moreover, tighterregulations aimed at curbing shadow-banking activity haveled to credit growth slowing sharply in October.

With the housing market still struggling following the recentrate cut and given the fact that inflation remains subdued,analysts have not ruled out further rate reductions to supportactivity. Real GDP growth forecasts have now slipped to7.3% for this year and 7.0% for next.


DECEMBER 2014


December 8, 2014

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2


Consumer 4.2 3.6 4.9 3.4 3.6 3.6 3.4 3.2 3.5 3.4Prices*Trade -16.0-18.1-16.0-20.5-17.6-18.4-17.1-24.0-18.0-19.4Balance (US$bn)

Oxford EconomicsHSBC EconomicsNomuraOCBC Wing Hang BankEcon Intelligence UnitJP Morgan ChaseBBVAINGCitigroupBarclays CapitalBank of China (HK)IHS EconomicsUBSGoldman Sachs AsiaBank of East AsiaHang Seng BankCredit SuisseDaiwa Capital MarketsBofA - Merrill Lynch

Consensus (Mean)


Comparison ForecastsAsian Development Bank (Sep. '14)Government of Hong Kong (Nov. '14)IMF (Oct. '14)

2.5 3.1 2.1 2.9 -3.7 3.4 3.5 2.7 12.6 6.9 3.2 3.4 na na 480.5 526.4 534.6 572.02.5 3.5 1.9 1.5 -4.1 7.9 4.0 4.0 10.3 10.0 3.3 3.3 na na na na na na2.5 3.2 2.5 3.1 -0.3 4.0 4.2 4.3 na na 3.2 3.4 na na 482.5 531.7 552.7 606.52.5 3.2 2.3 3.3 2.2 3.9 3.9 3.5 10.5 12.0 3.2 3.3 474.6 508.8 481.5 515.7 549.3 588.92.4 2.6 1.2 3.3 -1.8 2.8 4.0 3.5 13.7 0.3 3.3 3.4 na na 477.8 513.7 547.3 590.92.3 2.5 na na -1.5 2.6 4.0 3.1 9.5 9.5 3.3 3.4 na na na na na na2.3 3.3 3.9 3.9 3.8 4.2 4.1 3.5 10.4 10.2 3.4 3.4 488.5 531.0 486.8 558.0 536.0 618.02.3 2.5 3.1 5.0 4.1 4.0 4.3 3.5 na na 3.3 3.3 408.3 428.6 459.6 482.4 530.9 554.62.3 2.6 1.9 1.7 na na 4.4 4.2 na na 3.3 3.6 na na 477.6 498.9 546.0 569.12.2 2.5 2.0 2.9 -1.4 5.0 4.1 3.2 na na na na na na na na na na2.2 2.8 3.0 4.5 4.2 6.0 3.4 3.0 10.0 9.0 3.3 3.4 487.9 527.0 488.8 527.9 560.3 610.72.2 3.0 2.0 2.7 -2.7 3.9 4.3 3.6 10.2 10.1 3.2 3.3 na na 478.0 507.3 548.1 581.02.2 2.3 1.8 2.3 -2.7 1.4 3.8 2.3 na na 3.6 4.2 na na 473.9 494.4 541.6 564.92.1 2.7 1.9 2.1 -2.1 5.1 4.3 3.0 5.0 5.0 3.5 3.5 na na 482.6 525.2 548.6 591.92.1 2.4 1.0 1.5 1.5 3.0 4.1 3.5 10.5 7.5 3.2 3.4 470.0 494.0 477.3 501.2 547.1 577.22.1 2.6 1.8 2.1 -2.5 2.0 4.1 3.5 12.5 12.0 3.3 3.5 na na 474.9 498.7 544.6 577.32.0 3.0 2.1 3.3 5.1 6.5 4.1 3.5 7.3 7.4 na na 488.4 521.4 500.7 534.8 575.6 612.52.0 1.8 2.5 2.7 3.5 3.9 3.7 2.0 14.0 11.0 na na na na 477.3 501.1 547.1 569.51.9 2.1 na na na na 4.0 4.1 na na na na na na 477.1 489.7 530.5 542.8

2.2 2.7 2.2 2.9 0.1 4.1 4.0 3.4 10.5 8.5 3.3 3.4 469.6 501.8 479.8 512.9 546.3 583.0

2.2 2.8 2.3 3.0 1.5 4.3 3.9 3.4 10.0 8.7 3.3 3.5 472.5 507.1 482.6 518.7 549.3 589.22.4 3.0 2.7 3.6 3.2 4.2 3.8 3.5 10.5 8.7 3.3 3.4 472.2 508.9 489.3 527.0 555.5 597.22.5 3.5 3.9 5.0 5.1 7.9 4.4 4.3 14.0 12.0 3.6 4.2 488.5 531.0 500.7 558.0 575.6 618.01.9 1.8 1.0 1.5 -4.1 1.4 3.4 2.0 5.0 0.3 3.2 3.3 408.3 428.6 459.6 482.4 530.5 542.80.2 0.4 0.7 1.0 3.1 1.6 0.3 0.6 2.5 3.2 0.1 0.2 31.1 38.3 8.5 19.9 11.2 21.5

2.5 3.2 3.8 3.7

2.2 3.5 4.3 3.53.0 3.3 3.9 3.8 3.1 3.1

Historical DataGovernment and Background DataChief Executive - Mr. Leung Chun-ying Government - Special Admin-istrative Region of China. Governed by the Legislative Council (Legco),which is composed of 30 directly elected members and another 30elected by functional constituencies. Next Election - 2017 Chief Execu-tive election; 2016 (Legco and District Councils). Nominal GDP -HK$2,126bn (2013). Population - 7.2mn (mid-year, 2013). HK$/US$Exchange Rate - 7.756 (average, 2013).

HONG KONG


2014

2010 2011 2012 20136.8 4.8 1.5 2.96.1 8.4 4.1 4.37.7 10.2 6.8 3.32.3 5.3 4.1 4.38.1 12.9 11.1 12.44.3 3.4 3.3 3.4

381.2 420.3 435.2 452.0390.1 428.7 442.8 459.0433.1 483.6 504.4 523.6-43.0 -54.9 -61.6 -64.613.4 9.6 3.0 2.375.1 66.7 64.8 21.8

0.3 0.4 0.4 0.45.0 5.0 5.0 5.0


GrossFixed

Investment

ConsumerPrices

(Compos-ite Index)

MoneySupply

(HK$M2)

Re-Exports(US$bn)

MerchandiseExports

(fob, US$bn)

MerchandiseImports

(cif, US$bn)

Annual TotalAverage % Change on Previous Calendar Year


PrivateConsump-

tion

2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015

End Year,% change

Unemploy-ment Rate

(%)

YearAverage

* % change on previous year

Gross Domestic Product*Private Consumption*Gross Fixed Investment*Consumer Prices (composite index)*Money Supply (HK$M2), end yr*Unemployment Rate (annual avg.)Re-Exports (US$bn)Merch. Exports (fob, US$bn)Merch. Imports (cif, US$bn)Trade Balance (fob-cif, US$bn)Goods and Services Bal. (US$bn)Consolidated Budgt Bal. (HK$bn)3 mth Interbank Rate, % (end yr)Prime Lending Rate, % (end yr)1Data for fiscal years beginning April 1 ending March 31 (i.e. 2013 = April 2013 to March 2014, corresponding to FY13/14).

1

2015 2016

9

DECEMBER 2014


-10

-5

0

5

10

93 95 97 99 01 03 05 07 09 11 13 15 17 19

-75-55-35-15

525

93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15


-54.0 -45.6 6.7 13.2 na na 0.4 0.6 na nana na 2.8 5.3 na na 0.8 1.3 na na

-70.3 -74.8 2.9 4.0 na na 0.4 0.7 na na-67.8 -73.1 na na na na 0.4 1.0 5.0 5.3-69.5 -77.2 -2.2 -4.6 17.5 3.5 na na na na

na na 3.0 4.3 na na na na na na-49.2 -60.0 6.5 8.5 20.0 20.0 0.4 0.7 5.0 5.0-71.3 -72.2 6.7 9.8 18.5 -18.0 0.4 1.0 na na-68.4 -70.2 na na na na 0.4 0.6 na na

na na na na na na na na na na-71.4 -82.7 5.9 6.5 20.0 5.0 0.4 0.7 5.0 5.5-70.1 -73.7 2.3 2.6 na na na na 5.0 5.3-67.7 -70.6 2.8 4.4 na na na na na na-66.0 -66.7 5.6 11.3 na na na na na na-69.8 -76.0 na na na na 0.4 1.5 5.0 5.3-69.7 -78.6 na na na na na na na na-75.0 -77.7 2.2 4.0 na na na na na na-69.8 -68.4 na na na na na na na na-53.4 -53.1 na na na na na na na na

-66.5 -70.0 3.8 5.8 19.0 2.6 0.4 0.9 5.0 5.3

-66.7 -70.5 3.5 5.4 23.6 10.7-66.2 -70.2 4.6 6.0 24.4 9.9-49.2 -45.6 6.7 13.2 20.0 20.0 0.8 1.5 5.0 5.5-75.0 -82.7 -2.2 -4.6 17.5 -18.0 0.4 0.6 5.0 5.0

7.4 9.8 2.6 4.7 1.2 15.6 0.1 0.3 0.0 0.2

9.1 -28.3

External Balances


HONG KONG

China 54.8United States 9.3Japan 3.8Germany 2.1

China 47.8Japan 7.1Singapore 6.1United States 5.4



Direction of Trade - 2013

%

US$bnGoods andServicesBalance

ConsensusForecasts

ConsensusForecasts

TradeBalance


Goods &ServicesBalance(US$bn)

3-monthInterbankRate (%)

PrimeLendingRate (%)

Annual Total Rates on Survey Date

2014 2015 End EndMar '15 Dec '15End End

Mar '15 Dec '15

Consoli-dated

BudgetBalance(HK$bn)

Fiscal YearsApril-March

FY FY14/15 15/162014 2015

0.4% 5.0%

2.6

2.8

3.0

3.2

3.4

3.6

3.8

4.0



%


2015 Real GDPGrowth

Forecasts (%)


Economy Exceeds Expectations in Q3National accounts data for the September quarter showedthat the economy grew at a faster-than-expected rate afteraccelerating by 2.7% (y-o-y). This was much stronger thanthe prior quarter's 1.8%, and in q-o-q terms, the economybounced back from a slight contraction of 0.1% in Q2 toadvance by 1.7% in Q3. The acceleration was led by privateconsumption growth, which expanded by 1.9% (q-o-q), re-versing a 1.0% contraction in Q2. In the same period, exportsof goods also picked up pace to be up 2.0%. Despite theupbeat GDP data, government officials are not particularlyoptimistic about the outlook for Q4, especially in the wake ofcivil unrest. The authorities are concerned that ongoing pro-democracy demonstrations will hurt local sentiment as wellas investor confidence in the territory. At its height, tens ofthousands of demonstrators joined the protest movement,causing widespread disruption to the local economy. Thelatest development has seen a fresh outbreak of violentclashes between demonstrators and the police at the start ofthis month after protesters tried to surround governmentheadquarters. However, as support for the movement haswaned there are growing calls for the protests to end.

Meanwhile, October's retail sales report is the first piece ofdata release that can be used to gauge the impact of thedemonstrations on the territory. While the launch of newsmartphone models helped to shore up the sale of consumerdurable goods, retail activity by sales and volume slowed inOctober to 1.4% (y-o-y) and 4.3%, respectively (4.8% and6.6% in September). Retail sales have already come underpressure following a corruption crackdown by Beijing earlierthis year and scores of retailers have reported a deteriorationin the retail climate in the wake of civil unrest.


DECEMBER 2014

FERIHSBC Credit SuisseMorgan StanleyIHS EconomicsOxford EconomicsBBVAConfed of Indian IndustryIndia Ratings & ResearchGoldman SachsCitigroupBk of Tokyo-Mitsubishi UFJDeutsche BankMoody's AnalyticsNomuraTimetricUBSCRISILJP Morgan Chase

Consensus (Mean)


Comparison ForecastsAsian Development Bank (Sep. '14)OECD (Nov. '14)


December 8, 2014

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2


Consumer 8.3 8.1 7.4 5.5 5.9 5.9 5.8 6.2 6.2 5.8Prices*

Trade -28.8 -35.9-37.6-35.3-32.7-38.0 -36.9-36.9-34.3-38.1Balance (US$bn)

5.8 6.3 2.8 5.9 2.9 3.7 6.5 6.8 3.7 5.6 13.5 11.5 334.9 380.9 486.8 541.95.8 6.6 4.1 6.4 4.0 7.1 6.4 5.9 4.8 5.9 15.4 16.8 336.2 359.8 484.5 528.05.7 6.8 6.8 11.0 3.6 6.5 7.0 6.4 na na 12.7 13.5 na na na na5.7 6.5 4.1 5.5 3.0 5.0 6.8 6.0 3.9 4.1 na na 340.4 382.0 483.0 549.15.7 6.6 4.1 7.3 3.1 6.7 7.0 5.9 3.4 4.2 12.8 15.3 331.1 363.0 465.4 501.15.6 5.8 3.4 5.1 2.8 4.8 6.6 6.2 3.5 3.9 12.2 13.5 332.3 375.1 454.4 474.05.6 5.8 3.0 4.9 3.4 4.0 6.7 6.2 4.3 4.8 14.0 15.0 327.2 364.8 475.2 522.05.6 na 8.3 na 3.0 na 6.7 na 3.8 na 12.5 na 326.7 na 460.0 na5.6 na 6.2 na 4.6 na 7.8 na 5.3 na na na 343.9 na 506.8 na5.6 6.5 3.6 6.3 2.7 4.2 6.7 5.8 na na 16.0 17.0 334.2 370.0 482.9 524.05.6 6.5 na na 3.9 5.9 7.2 6.2 na na na na 336.1 358.0 480.2 504.25.5 5.7 3.4 3.5 3.5 4.0 7.1 6.3 4.3 3.9 14.2 15.8 324.9 342.8 450.6 471.05.5 6.5 3.8 7.5 3.0 4.9 6.7 6.0 3.5 4.5 14.0 14.5 337.0 365.7 487.8 529.35.5 6.2 3.8 7.6 2.8 4.0 6.6 5.5 na na 13.4 9.2 na na na na5.5 6.6 6.0 8.6 2.9 5.2 6.6 5.4 3.8 1.5 12.0 13.5 331.4 341.3 473.5 498.15.5 6.1 5.0 7.1 3.2 4.0 8.3 6.8 5.3 5.1 13.8 14.5 335.4 359.6 479.6 509.55.5 5.8 2.7 5.6 na na 6.5 5.6 na na na na 319.1 325.5 439.0 432.45.5 6.3 4.6 6.5 na na 6.7 6.0 na na na na 334.5 na 484.9 na5.3 6.0 na na 4.5 9.3 6.8 6.4 4.4 4.0 17.0 18.0 337.4 361.4 477.3 524.5

5.6 6.3 4.5 6.6 3.3 5.3 6.9 6.1 4.2 4.3 13.8 14.5 333.1 360.7 474.8 507.8

5.6 6.3 5.1 6.7 3.6 5.5 7.3 6.5 4.7 5.1 14.0 14.9 334.7 364.6 479.8 520.75.5 6.2 4.8 6.6 4.0 5.7 8.1 7.1 5.5 5.5 14.4 14.9 337.6 367.3 488.7 531.05.8 6.8 8.3 11.0 4.6 9.3 8.3 6.8 5.3 5.9 17.0 18.0 343.9 382.0 506.8 549.15.3 5.7 2.7 3.5 2.7 3.7 6.4 5.4 3.4 1.5 12.0 9.2 319.1 325.5 439.0 432.40.1 0.3 1.5 1.8 0.6 1.6 0.5 0.4 0.6 1.2 1.5 2.4 6.0 15.5 16.4 31.4

5.5 6.3 5.7 5.57.1 6.3 4.3 3.8

Historical Data1Government and Background Data

Prime Minister- Mr. Narendra Modi (BJP Party). Government - The Hindunationalist Bharatiya Janata Party won 282 seats out of a total of 543 in the lowerhouse of parliament. Next Election - 2019 (Parliamentary). Nominal GDP- Rs105.4tn (2013/14). Population - 1.3bn (mid-year, 2013). Rupee/US$Exchange Rate - 58.45 (average, 2013/14).

INDIA

1 All data are for fiscal years (i.e. FY12 = April '12 to March '13)2 Historical data through FY11 shows the CPI for Industrial Workers. From

FY12 onwards data refers to the All India Combined (Rural plus Urban)CPI series, which we have polled for with effect from February 2014.



ConsumerPrices

WholesalePrices

MoneySupply

(M3)

MerchandiseExports

(fob, customsbasis, US$bn)

MerchandiseImports

(cif, customsbasis, US$bn)

End Year, %change Annual TotalAverage % Change on Previous Fiscal Year


GrossFixed

Investment

FY14 FY15 FY14 FY15 FY14 FY15 FY14 FY15 FY14 FY15 FY14 FY15 FY14 FY15 FY14 FY15

Annual data are for fiscalyears beginning April 1

2014

* % change on previous yearGross Domestic Product*Gross Fixed Investment*Industrial Production*Consumer Prices*2Wholesale Prices*Money Supply (M3), end yr*Merch. Exports (fob, US$bn)Merch. Imports (cif, US$bn)Trade Balance, (fob-cif, US$bn)Current Account Bal. (US$bn)Gross Central Government Fiscal Balance (Rs bn)91-day T-bill Rate, % (end yr)10 Yr Bond Yield, % (end yr)

FY10 FY11 FY12 FY138.9 6.7 4.5 4.7

11.0 12.3 0.8 -0.18.2 2.9 1.1 -0.1

10.4 8.3 10.2 9.59.6 8.9 7.4 6.0

16.1 13.5 13.6 13.2251.1 306.0 300.4 314.4369.8 489.3 490.7 450.2

-118.6 -183.4 -190.3 -135.8-48.1 -78.2 -88.2 -32.4

-3736 -5160 -4902 -52457.1 8.9 8.2 8.98.1 8.6 8.0 8.8


2015 2016

11

DECEMBER 2014


-151.8 -161.0 -68.2 -81.4 -6078 -6714 na na 8.6 9.0-148.3 -168.2 -27.9 -37.9 -4694 -4553 8.6 8.1 8.0 7.3

na na -30.6 -46.8 na na na na na na-142.5 -167.2 -38.5 -50.9 -5257 -5498 na na na na-134.3 -138.1 -41.6 -50.0 na na na na na na-122.1 -98.9 -31.6 -32.0 -5294 -5391 8.6 8.5 8.1 8.0-148.0 -157.2 -34.9 -52.1 na na na na 7.8 7.5-133.3 na -42.6 na -5312 na na na na na-162.9 na -48.7 na -5311 na 8.2 na 8.1 na-148.7 -154.0 -41.5 -34.0 na na na na na na-144.1 -146.2 -33.2 -30.0 na na 7.9 7.4 8.3 7.8-125.7 -128.2 -37.8 -36.9 na na na na na na-150.8 -163.6 -33.6 -37.1 -5655 -5620 8.0 7.5 7.6 7.2

na na na na na na na na na na-142.1 -156.8 -27.6 -37.8 -5216 -5004 na na 8.0 7.5-144.2 -149.9 -39.5 -44.5 na na na na na na-119.8 -106.9 -15.8 -4.9 na na na na na na-150.3 na -32.2 na -5343 na na na 8.0 na-140.0 -163.1 -27.1 -40.4 -5848 na na na na na

-141.7 -147.1 -36.3 -41.1 -5401 -5463 8.3 7.9 8.0 7.7

-145.1 -156.2 -37.6 -47.7 -5433 -5578-151.1 -163.7 -42.8 -51.1 -5451 -5827-119.8 -98.9 -15.8 -4.9 -4694 -4553 8.6 8.5 8.6 9.0-162.9 -168.2 -68.2 -81.4 -6078 -6714 7.9 7.4 7.6 7.2

11.5 21.9 10.9 16.0 381 726 0.3 0.5 0.3 0.6

-35.3 -39.0

2468

101214

93 95 97 99 01 03 05 07 09 11 13 15 17 19

-250-210-170-130-90-50-1030

93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15

Real GDP Growth and Inflation (fiscal years)

China 11.0Saudi Arabia 7.8United Arab Emirates 7.1United States 4.8


United States 12.4United Arab Emirates 10.2China 4.6Singapore 4.3

Trade and Current Account Balances(fiscal years)

US$bn

INDIA


Rates on Survey Date8.2% 7.9%

Annual Total Fiscal Years(Apr-Mar)Gross

Central GovtFiscal

Balance,(Rsbn)

91-dayTreasury

Bill Rate (%)

10 YearGovernmentBond Yield

(%)



FY14 FY15 FY14 FY15 FY14 FY15

TradeBalance

Current AccountBalance

%

ConsensusForecasts

ConsensusForecasts




4.5

5.0

5.5

6.0

6.5

7.0

7.5

8.0

8.5

9.0

2013Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec


FY2014 (April 2014 -March 2015) Con-

sumer Price InflationForecasts (%)

FY2014 (April 2014 -March 2015) Real GDP

GrowthForecasts (%)

%Consumer Prices(% chg yoy)


Pressure Builds for a Rate CutAlthough economic activity slowed in the three months toSeptember, real GDP growth still beat analysts' expectationsto come in at 5.3% from a year earlier. This figure was slightlyhigher than the 5.1% recorded in the corresponding period ofFY13/14, but somewhat weaker than the 5.7% pace postedthree months earlier. The better-than-expected GDP readingwas boosted by growth in services and stronger farm outputin spite of a poor monsoon. Encouragingly, growth for the firstsix months of the current fiscal year now stands at 5.5%, wellexceeding the 4.9% pace notched up in the same period ofFY13/14. Nonetheless, the growth slowdown, although not assevere as many had feared, will undoubtedly increase pres-sure on the government to step up its reform efforts. PremierModi's government was swept into power in May on the backof its pro-reform mandate, but barring plans to open up certainsectors to foreign investors and cutting fuel subsidies, it hasyet to make any major inroads on the reform front. Whileinvestors will be keen to see the government deliver on itspromise to embrace structural reforms, pressure is alsobuilding for the Reserve Bank of India (RBI) to cut interestrates. Despite calls for looser monetary policy the RBIremained on hold at this month's meeting but hinted at apossible rate cut early next year provided inflation continuesto head lower and developments on the fiscal front remainencouraging. In October, lower global oil prices drove thewholesale price index down to 5-year low of 1.8% (y-o-y), whileconsumer price rises hit an all time low of 5.52%.

In spite of renewed softness evident in the latest GDP report,growth expectations for this year have remained firm at 5.6%,which is slightly above the central bank's 5.5% target. Mean-while, inflation forecasts have dipped again this month.

For FY12/13-FY19/20, data refers to theAll India Combined (Rural plus Urban)CPI. Prior data refers to the CPI-IndustrialWorkers.


DECEMBER 2014


December 8, 2014

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2


Consumer 7.8 7.1 4.4 6.2 7.1 7.1 7.0 5.6 4.5 4.4Prices*

Manufacturing 5.1 5.0 4.6 4.4 4.6 4.7 4.9 5.0 5.3 5.6Production*

5.5 5.7 5.2 5.0 4.8 5.6 na na 6.0 5.1 na na na na na na na na5.2 6.0 5.5 5.3 4.6 5.8 4.1 5.0 6.0 4.6 9.7 11.4 na na 179.6 178.9 173.9 170.75.1 5.8 5.6 5.8 5.0 6.8 na na 6.1 5.9 6.9 9.0 na na 178.3 184.4 178.3 181.25.1 5.8 5.0 5.0 4.9 6.1 na na 6.3 7.0 na na na na 181.5 190.5 182.0 184.05.1 5.4 5.3 4.9 5.2 7.6 na na 5.7 7.4 12.1 13.7 na na na na na na5.1 5.5 5.3 5.5 4.9 7.0 4.6 5.0 6.4 6.0 11.0 12.0 141.1 150.1 182.5 194.1 180.1 189.55.1 5.3 5.4 5.2 4.6 6.2 na na 6.6 7.0 11.0 11.6 150.2 156.6 179.3 183.0 169.7 169.55.1 5.4 5.2 5.0 5.1 6.7 4.8 5.2 6.3 7.3 12.4 16.3 147.6 168.6 191.0 216.2 182.5 198.65.1 5.1 5.3 4.1 na na na na 6.3 7.2 na na na na 176.2 174.0 169.8 164.75.1 5.1 5.5 5.1 4.8 6.2 4.8 4.5 6.4 6.9 12.0 11.8 na na 180.2 181.9 171.0 172.15.1 5.2 5.5 5.1 4.8 5.2 na na 6.5 7.5 na na na na 179.9 185.1 172.8 177.85.0 5.3 5.5 5.0 5.1 6.3 na na 6.0 6.0 11.8 13.0 na na 182.1 200.2 178.1 193.95.0 5.5 5.2 4.7 4.5 6.0 5.1 6.2 6.3 7.6 12.5 12.4 na na 179.5 195.6 168.7 182.15.0 5.0 5.3 4.7 4.4 5.1 4.0 4.1 6.2 6.3 11.0 10.0 na na na na na na5.0 5.4 5.5 5.0 4.8 5.4 4.8 5.4 6.4 6.7 11.5 11.5 145.6 148.3 175.6 173.9 168.5 165.65.0 5.3 5.5 5.3 4.7 4.8 na na 6.3 5.8 na na na na na na na na5.0 5.5 5.4 5.4 5.2 6.4 5.0 5.7 6.4 6.5 11.0 11.5 149.2 155.0 180.0 194.0 180.0 195.04.9 5.1 na na -1.0 6.0 na na 6.4 6.8 11.0 10.0 na na 184.1 187.8 178.9 182.5

5.1 5.4 5.4 5.1 4.5 6.1 4.6 5.1 6.3 6.5 11.1 11.9 146.7 155.7 180.7 188.5 175.3 180.5

5.1 5.4 5.3 5.1 4.5 6.0 4.6 5.2 6.1 6.2 11.5 12.4 147.5 156.2 182.0 191.2 175.1 182.25.2 5.6 5.4 5.3 4.7 6.3 4.6 5.3 6.1 6.0 10.2 11.9 147.4 156.7 184.2 197.0 177.1 187.65.5 6.0 5.6 5.8 5.2 7.6 5.1 6.2 6.6 7.6 12.5 16.3 150.2 168.6 191.0 216.2 182.5 198.64.9 5.0 5.0 4.1 -1.0 4.8 4.0 4.1 5.7 4.6 6.9 9.0 141.1 148.3 175.6 173.9 168.5 164.70.1 0.3 0.2 0.4 1.4 0.7 0.4 0.7 0.2 0.8 1.5 1.8 3.6 8.0 3.7 11.2 5.2 11.0

5.3 5.8 5.8 6.95.2 5.5 6.0 6.75.1 5.2 5.5 5.4 4.9 5.2 6.4 6.2

OCBC BankHSBC EconomicsOxford EconomicsBofA - Merrill LynchGoldman Sachs AsiaINGMandiri SekuritasDanareksa SecuritiesCitigroupIHS EconomicsNomuraFERIEcon Intelligence UnitCredit SuisseANZ BankBarclays CapitalDBS BankJP Morgan Chase

Consensus (Mean)


Comparison ForecastsAsian Development Bank (Sep. '14)IMF (Oct. '14)OECD (Nov. '14)

* % change on previous yearGross Domestic Product*Household Consumption*Gross Fixed Investment*Manufacturing Production*Consumer Prices*Money Supply (M2), end yr*Non-Oil and Gas Exports (fob, US$bn)Merch. Exports (fob, US$bn)Merch. Imports (fob, US$bn)Trade Balance (fob-fob, US$bn)Current Account Bal. (US$bn)3 mth Deposit Rate, % (end yr)10 Yr Govt Bond, % (end yr)

Historical Data


HouseholdConsump-

tion

GrossFixed

Investment

Manufac-turing

Production

ConsumerPrices

MoneySupply

(M2)

Merchan-dise

Exports(fob,

US$bn)

INDONESIA


Merchan-dise

Imports(fob,US$bn)

Non-Oil and GasExports

(fob, US$bn)

Annual TotalEnd Year,% change

2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015

Government and Background DataPresident: Joko Widodo Government - The Indonesian Democratic Partyof Struggle (PDI-P) won the 2014 April legislative elections with 109 seats outof a total of 560 seats. They have formed a coallition with the NasDem Party,National Awakening Party (PKB) and the Hanura Party, giving the coaltioncontrol of 207 seats. Next Elections - House and Senate (July, 2019).Nominal GDP - Rp9,084tn (2013). Population - 249.9mn (mid-year, 2013).Rupiah/US$ Exchange Rate - 10,411 (average, 2013).



20152014

2010 2011 2012 20136.2 6.5 6.3 5.84.7 4.7 5.3 5.38.5 8.3 9.7 4.74.7 6.1 5.7 5.65.1 5.3 4.0 6.4

15.4 16.4 15.0 12.8

121.3 153.0 151.8 148.5150.0 191.1 187.3 182.1119.0 157.3 178.7 176.331.0 33.8 8.7 5.85.1 1.7 -24.4 -29.16.7 5.5 4.9 8.07.5 6.0 5.5 8.4

2016

13

DECEMBER 2014


-15

-5

5

15

25

93 95 97 99 01 03 05 07 09 11 13 15 17 19

na na na na na na na na5.7 8.2 -26.0 -21.4 7.8 7.5 7.8 7.50.0 3.2 -23.4 -22.0 8.0 8.4 8.1 8.2

-0.5 6.5 -25.7 -20.9 na na na nana na -25.0 -29.1 na na na na2.4 4.5 -25.4 -22.8 na na 7.5 7.09.7 13.5 -29.3 -28.4 na na 8.4 8.28.5 17.5 -12.9 -9.4 7.6 7.2 8.1 7.66.4 9.3 -26.7 -25.4 7.3 7.3 7.9 8.39.2 9.8 -28.2 -27.6 na na na na7.0 7.3 -26.5 -23.5 na na na na4.1 6.4 -27.2 -24.6 na na na na

10.9 13.5 -26.0 -24.3 na na na nana na -25.5 -24.2 na na na na7.1 8.3 -25.0 -24.9 na na na nana na -24.3 -16.9 na na na na0.0 -1.0 -26.0 -24.0 7.1 7.1 na na5.2 5.3 -25.0 -26.7 na na na na

5.4 8.0 -25.2 -23.3 7.6 7.5 8.0 7.8

6.9 8.9 -25.2 -22.17.1 9.4 -25.9 -23.7

10.9 17.5 -12.9 -9.4 8.0 8.4 8.4 8.3-0.5 -1.0 -29.3 -29.1 7.1 7.1 7.5 7.03.7 4.7 3.5 4.6 0.4 0.5 0.3 0.5

-27.6 -26.5

-40-30-20-10

010203040

93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15




TradeBalance(fob-fob,US$bn)

Annual Total Rates on Survey Date



China 16.0Singapore 13.7Japan 10.3Malaysia 7.1


Japan 14.8China 12.4Singapore 9.1United States 8.6


%

3-monthDepositRate (%)

INDONESIA

2014 2015 2014 2015

US$bn

ConsensusForecasts

Current Account Balance

Trade BalanceConsensusForecasts

7.1%



8.0%10 Year

GovernmentBond

Yield (%)

Inflation1998 = 58.4%

5.0

5.2

5.4

5.6

5.8

6.0

6.2

6.4

6.6

6.8



%

2015 Real GDPGrowth

Forecasts (%)



Fuel Subsidies CutIndonesia's new president, Joko Widodo, has fulfilled his pre-election promise to cut fuel subsidies by hiking both petroland diesel prices by more than 30% last month. The moveis highly unpopular and has already sparked some minorstreet protests in Jakarta. However, it is hoped that it willsave the government more than US$8bn in 2015 and enablefunds to be channelled towards much needed improvementsin the nations infrastructure. Combined with falling oil prices,the fuel hike of around 2,000 rupiah or US$0.16 per litreshould curb imports and thus help to correct the countryslarge current account deficit, which looks set to reachUS$-25.2bn this year. Meanwhile, Bank Indonesia respondedimmediately to the controversial fuel price hike by raising itsbase rate for the first time this year to 7.75% in a bid tocontain an associated rise in inflationary pressures. Indeed,inflation has already started to climb higher after data forNovember showed that consumer prices soared by 1.5% (m-o-m). This translated into a 6.2% increase in annual terms,and the consensus now reckons that inflation will advance by6.5% in 2015, following a 6.3% increase this year.

In another sign underscoring the new government's commit-ment to economic reforms, the president outlined a series ofpossible reform measures at last months G20 summit.These included plans to increase the nations tax-to-GDPratio to 16% from its current 12-13% level and to simplify thecurrent business licensing system. It is hoped the latter willhelp facilitate the setting up of new businesses in Indonesia,and in turn, encourage greater levels of foreign investment inthe country. The economy looks set to grow by 5.4% in 2015,which is much lower than the 7% annual average growthtargeted by the government over the next five years.


DECEMBER 2014

Econ Intelligence UnitJP Morgan - JapanNippon Steel & Sumikin RsrchDeutsche SecuritiesBank of Tokyo-Mitsubishi UFJHitachi Research InstituteDaiwa Institute of ResearchMizuho Research InstituteNLI Research InstituteOxford EconomicsMizuho SecuritiesCitigroup JapanHSBCToyota Motor CorporationNomura SecuritiesCredit SuisseDai-Ichi Life ResearchIHS EconomicsITOCHU InstituteJapan Ctr for Econ ResearchMitsubishi Research InstituteGoldman SachsMitsubishi UFJ ResearchUBSMorgan Stanley

Consensus (Mean)

Last Month's Mean3 Months AgoHighLowStandard Deviation

Comparison ForecastsIMF (Oct. '14)OECD (Nov. '14)


December 8, 2014

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

Gross Domestic 2.2 -0.3 -1.2 0.2 -0.8 1.5 2.4 1.8 1.6 1.5Product*

Private 3.2 -2.8 -2.7 -1.8 -3.4 2.2 2.1 1.6 1.3 1.3Consumption*Consumer 1.5 3.6 3.3 2.9 2.7 0.9 0.9 1.3 1.4 1.4Prices*

Historical Data

1.1 1.6 -0.1 0.5 na na 1.8 0.7 2.9 2.2 3.7 2.9 na na na na na na0.6 1.6 -0.9 1.0 6.2 4.0 2.2 2.6 2.8 1.1 3.3 -0.2 na na na na na na0.6 2.8 -0.9 1.9 4.5 3.1 2.1 1.0 2.8 1.3 3.3 0.9 0.6 2.3 2.8 2.8 0.89 0.910.5 1.4 -0.8 0.7 5.5 1.8 2.1 1.4 2.9 1.4 3.2 -0.4 0.9 1.6 na na na na0.5 1.2 -0.9 0.0 5.7 3.6 1.8 0.2 2.6 1.2 3.1 -0.3 na na na na na na0.5 1.5 -0.9 0.1 5.5 0.4 2.0 2.5 2.9 2.1 3.4 1.4 0.6 0.5 na na 0.90 0.930.4 1.2 -1.0 0.6 4.6 2.7 2.1 2.1 3.2 1.3 3.2 2.3 na na na na na na0.4 2.0 -0.9 1.3 5.9 4.0 1.9 1.2 2.8 1.4 3.2 1.0 0.8 1.2 na na 0.89 0.920.4 0.9 -1.0 0.1 5.6 1.3 2.2 1.5 2.7 1.1 3.3 0.9 1.1 1.6 na na 0.89 0.900.3 0.8 -0.9 1.1 3.7 -0.1 2.3 1.9 2.8 1.6 3.5 1.6 1.5 0.7 na na 0.89 0.890.3 1.7 -0.9 1.1 4.9 3.9 2.4 4.6 2.8 1.6 3.2 0.2 1.5 1.5 na na 0.87 0.920.3 0.9 -1.0 0.5 5.3 1.9 1.6 0.2 2.9 1.4 na na na na na na na na0.3 0.6 -1.0 0.3 5.4 0.1 1.7 1.6 2.9 1.7 3.4 0.9 0.9 1.2 na na na na0.3 1.2 -0.9 1.0 8.0 5.0 na na 2.8 2.4 na na na na na na na na0.2 1.5 -1.1 0.3 -4.7 -7.1 2.1 1.5 2.8 1.0 3.3 0.4 0.9 1.0 na na na na0.2 0.3 -1.2 -0.6 4.2 0.0 2.4 1.5 2.6 0.9 na na na na na na na na0.2 1.1 -1.1 0.8 4.5 2.5 2.1 2.1 2.6 1.2 3.3 0.8 na na na na na na0.2 1.1 -1.1 1.0 4.4 4.0 2.1 2.2 2.7 1.0 3.2 1.1 na na na na 0.89 0.910.2 1.1 -1.1 -0.1 4.9 5.4 2.0 2.5 2.9 1.5 3.3 2.0 1.0 1.3 2.9 2.5 0.89 0.850.2 0.9 -1.1 0.2 4.0 1.0 2.1 1.2 2.7 1.4 3.4 0.9 0.9 0.7 na na 0.89 0.930.2 0.9 -1.0 0.4 4.9 3.9 2.1 1.4 2.6 1.1 3.3 0.3 na na na na 0.88 0.840.1 0.9 -1.2 0.3 4.1 0.6 2.1 0.7 2.8 1.6 3.2 2.1 na na na na na na0.1 0.8 -1.0 0.3 4.6 2.2 2.1 0.7 2.8 0.9 3.2 -0.9 0.8 0.5 na na 0.87 0.870.1 1.2 -1.1 0.5 4.1 4.4 2.6 1.8 2.9 2.0 na na na na na na na na0.0 0.6 -1.2 0.2 na na 1.7 3.7 2.7 1.5 na na na na na na na na

0.3 1.2 -1.0 0.5 4.6 2.1 2.1 1.7 2.8 1.4 3.3 0.9 1.0 1.2 2.9 2.6 0.89 0.90

1.0 1.3 -0.6 0.6 6.4 3.3 2.3 1.7 2.8 1.9 3.3 1.8 0.9 1.1 2.8 2.6 0.89 0.901.2 1.3 -0.2 0.5 7.2 3.2 3.1 2.0 2.8 1.8 3.5 2.2 0.8 1.0 2.8 2.6 0.90 0.901.1 2.8 -0.1 1.9 8.0 5.4 2.6 4.6 3.2 2.4 3.7 2.9 1.5 2.3 2.9 2.8 0.90 0.930.0 0.3 -1.2 -0.6 -4.7 -7.1 1.6 0.2 2.6 0.9 3.1 -0.9 0.6 0.5 2.8 2.5 0.87 0.840.2 0.5 0.2 0.5 2.2 2.6 0.2 1.0 0.1 0.4 0.1 1.0 0.3 0.5 0.1 0.2 0.01 0.03

0.9 0.8 2.7 2.00.4 0.8 -0.9 1.0 2.9 1.8

* % change on previous yearGross Domestic Product*Private Consumption*Business Investment*Industrial Production*Consumer Prices*Domestic Corporate Goods Prices*Total Cash Earnings (nominal)*New Car Registrations, mnHousing Starts, mnUnemployment Rate, %Current Account, tnGeneral Govt Budget Balance,

SNA basis, fisc. years1, tn3 mth TIBOR, % (end yr)10 Yr Govt Bond, % (end yr)

2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015

JAPAN



*Percentage Change (year-on-year) e = consensus estimate based on latest survey

PrivateConsump-

tion

BusinessInvestment


ConsumerPrices

DomesticCorporate

GoodsPrices

Total CashEarnings(nominal)

New CarRegistra-

tions (mn)

HousingStarts(mn)

Annual Total


20152014

1Data for fiscal years beginning April 1 ending March 31 (i.e. 2012= April 2012 to March 2013, corresponding to FY12/13).

2010 2011 2012 20134.7 -0.4 1.7 1.62.8 0.3 2.3 2.10.7 4.1 3.6 0.5

15.6 -2.6 0.2 -0.6-0.7 -0.3 0.0 0.4-0.1 1.5 -0.9 1.30.5 -0.2 -0.6 -0.12.9 2.4 3.0 2.9

0.81 0.83 0.88 0.985.1 4.6 4.4 4.0

19.0 10.0 5.0 3.3

-40.4 -42.0 -41.3 -40.6 e0.3 0.3 0.3 0.21.1 1.0 0.8 0.7

Government and Background DataPrime Minister - Mr. Shinzo Abe of the Liberal Democratic Party of Japan(LDP) was elected as Prime Minister in December 2012. Parliament -President Abe's LDP won 294 of the 480 seats of the Lower House ofParliament and has formed a coalition with the minority party, New KomeitoParty. Next Elections House of Representatives (December, 2014).Nominal GDP - 478.1tn (2013). Population - 127.1mn (mid-year,2013). Yen/$ Exchange Rate - 97.51 (average, 2013).

2016

15

DECEMBER 2014


-6

-5

-4

-3

-2

-1

0

1

2

3

4

5

93 95 97 99 01 03 05 07 09 11 13 15 17 19

3.6 3.4 na na na na na na na na3.6 3.5 0.7 7.3 na na na na 0.4 0.53.6 3.0 2.8 11.5 na na 0.2 0.2 0.5 0.73.6 3.4 1.7 9.5 -32.5 -30.8 0.2 0.2 0.6 0.7na na 1.4 6.3 na na 0.2 0.2 0.5 0.73.5 3.3 2.1 12.9 na na na na 0.6 0.83.6 3.5 1.6 7.4 na na 0.2 0.2 0.6 0.73.6 3.5 1.7 7.0 na na 0.2 0.2 0.6 0.83.6 3.7 1.6 5.5 -38.1 -36.4 0.2 0.2 0.5 0.63.6 3.7 0.4 2.4 -33.0 -27.1 0.1 0.1 0.5 0.53.6 3.5 1.8 8.5 na na 0.2 0.2 0.6 0.83.6 3.5 0.7 3.5 -38.9 -32.2 0.1 0.1 0.6 0.83.6 3.6 0.6 1.4 -32.1 -32.1 0.1 0.1 0.5 0.43.7 3.6 na na na na na na na na3.6 3.5 2.7 12.1 na na na na 0.5 0.73.6 3.6 1.9 8.2 na na 0.2 na 0.6 na3.6 3.5 2.0 10.4 na na 0.2 0.2 0.5 0.6na na 1.7 1.2 na na 0.2 0.3 0.5 0.53.6 3.3 1.6 7.2 -38.8 -36.8 0.2 0.2 0.5 0.73.6 3.5 0.9 4.2 -36.6 -28.8 na na 0.5 0.63.6 3.7 1.8 9.8 na na na na 0.4 0.53.6 3.6 0.5 2.7 na na na na na na3.6 3.5 2.4 9.4 -38.3 -33.7 0.2 0.2 0.5 0.63.6 na 0.5 3.8 na na na na na na3.5 3.3 na na na na na na na na

3.6 3.5 1.5 6.9 -36.0 -32.2 0.2 0.2 0.5 0.6

3.6 3.5 0.9 4.2 -36.4 -31.23.6 3.5 1.2 4.0 -37.1 -32.93.7 3.7 2.8 12.9 -32.1 -27.1 0.2 0.3 0.6 0.83.5 3.0 0.4 1.2 -38.9 -36.8 0.1 0.1 0.4 0.40.0 0.2 0.7 3.5 3.0 3.4 0.0 0.0 0.1 0.1

3.7 3.83.6 3.5

JAPAN


YearAverage

AnnualTotal

Fiscal Years(Apr-Mar)

2014 2015 2014 2015

Rates on Survey Date

%

FY FY14-15 15-16

Unemploy-ment

Rate (%)

CurrentAccount

(tn)

GeneralGovernment

BudgetBalance

(tn)

3 monthYen (TIBOR)

Rate (%)

10 YearGovt BondYield (%)

ConsensusForecasts

0.2% 0.4%

End End Mar '15 Dec '15


United States 18.8China 18.1South Korea 7.9Hong Kong 5.2

China 21.7United States 8.6Australia 6.1Saudi Arabia 6.0



End End Mar '15 Dec '15

0.8

1.0

1.2

1.4

1.6

1.8

2.0



%



2015 Real GDPGrowth

Forecasts (%)

Consumer Prices(% chg yoy)

Economy Officially in RecessionJapan currently finds itself in a technical recession after Q3data revealed that GDP declined by a further 0.5% (q-o-q)following the 1.7% (q-o-q) contraction recorded in Q2. Thiswas due to continued falls in business investment andindustrial production, of 0.4% (q-o-q) and 1.9% (q-o-q),respectively. These numbers highlight the deterioration inactivity on the back of Aprils consumption tax hike, whichwas introduced in order to help reduce some of Japans fiscaloverhang. However, it now appears to have put the brakes onactivity. The news has also shone the spotlight on Abenomicswhich hitherto has relied on monetary and fiscal stimulusmeasures to prop up activity. Despite the precarious situa-tion, the Bank of Japan remained optimistic at its latestmeeting as it voted against a change in monetary policy andchose to continue with the current pace of quantitativeeasing, insisting that the nation is on the road to recovery.The central bank is perhaps counting on the recent pick upin industrial output or the external sector to boost therecovery. The depreciation of the yen has lifted exports inrecent months, with a 9.6% (y-o-y) increase in Octoberproviding relief for exporters.

With the economy sputtering, Prime Minister Abe has calleda snap election for December 14. Polls indicate that in spiteof ongoing debate over whether Abenomics has worked, Mr.Abes Liberal Democratic Party still appears to hold a stronglead over opposition parties. A victory will ensure that thegovernment can proceed with proposals for a second tax hikein April 2017. The planned increase has been postponed by18 months from its original October 2015 date, a move whichit is hoped will allow activity to stabilise at a stronger level.

16

DECEMBER 2014



December 8, 2014

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

Gross Domestic 6.2 6.5 5.6 5.2 5.4 4.6 5.1 5.2 4.8 5.2

Consumer 3.4 3.3 3.0 2.8 2.8 4.3 4.6 4.2 3.9 3.1Prices*

Trade 10.2 9.3 9.0 10.0 9.4 8.1 8.4 9.1 na naBalance (US$bn)

6.0 5.0 6.5 5.5 8.5 8.6 4.0 4.7 3.2 4.0 6.0 8.7 217.4 225.4 184.2 193.06.0 5.4 6.1 6.6 7.0 7.4 na na 3.1 3.3 na na 231.6 243.4 193.9 209.06.0 5.3 6.8 5.5 na na na na 3.2 3.9 na na 225.5 249.3 185.3 210.86.0 5.0 6.7 5.3 4.6 5.7 na na 3.1 4.6 na na 223.0 227.7 185.0 188.35.9 5.5 6.7 6.5 5.4 5.5 na na 3.2 3.8 na na na na na na5.9 4.8 6.8 4.2 4.3 5.2 6.1 3.7 3.1 4.0 5.8 8.3 222.2 220.7 183.2 189.95.9 5.1 6.7 5.9 4.3 4.0 5.9 4.0 3.1 4.2 6.9 5.9 226.9 222.1 190.0 194.15.8 4.8 5.9 5.2 8.3 9.5 4.3 2.4 3.2 3.8 6.0 6.0 na na na na5.8 5.3 6.5 5.5 7.8 7.4 5.0 4.4 3.2 4.5 na na 241.8 259.6 205.1 219.85.8 5.0 6.1 5.3 4.5 4.2 na na 3.3 4.5 6.3 6.0 237.9 247.0 211.0 216.05.8 5.1 6.6 5.8 0.5 6.3 na na 3.3 3.9 5.8 7.3 na na na na5.8 5.4 6.2 5.2 5.9 5.3 5.6 6.0 3.2 4.0 5.1 11.2 229.3 240.8 189.9 197.15.8 5.0 5.9 5.5 5.7 5.1 4.7 3.8 3.1 3.5 6.0 6.0 227.1 242.3 187.5 200.65.8 4.7 6.6 4.7 4.7 3.8 na na 3.3 3.7 9.2 8.4 231.9 240.9 204.9 217.05.7 5.1 6.7 5.5 5.6 5.9 5.5 3.6 3.1 4.2 5.8 11.3 224.1 238.9 185.8 201.35.7 4.5 6.9 5.7 4.6 1.8 5.3 3.0 3.1 3.9 na na na na na na5.6 4.7 na na 3.2 6.0 3.0 4.0 3.2 4.3 6.0 4.0 234.9 242.0 199.0 217.24.9 5.1 6.9 7.1 5.0 5.0 na na 3.3 3.6 na na na na na na

5.8 5.0 6.5 5.6 5.3 5.7 4.9 4.0 3.2 4.0 6.3 7.5 228.7 238.5 192.7 204.2

5.7 5.2 6.3 5.4 6.4 6.3 5.0 4.5 3.2 4.0 6.9 7.8 230.6 247.4 195.1 211.85.6 5.1 6.3 5.5 6.3 6.4 4.7 4.6 3.2 3.6 8.3 8.6 232.5 252.7 196.5 214.46.0 5.5 6.9 7.1 8.5 9.5 6.1 6.0 3.3 4.6 9.2 11.3 241.8 259.6 211.0 219.84.9 4.5 5.9 4.2 0.5 1.8 3.0 2.4 3.1 3.3 5.1 4.0 217.4 220.7 183.2 188.30.2 0.3 0.3 0.7 1.9 1.8 1.0 1.0 0.1 0.3 1.1 2.3 6.8 11.4 9.3 11.3

5.7 5.3 3.3 3.65.9 5.2 2.9 4.1

CIBD - CIMBEcon Intelligence UnitCitigroupNomuraBarclays CapitalDeutsche BankIHS EconomicsCredit SuisseANZ BankBofA - Merrill LynchGoldman Sachs AsiaHSBC EconomicsINGOxford EconomicsFERIUBSJP Morgan ChaseOCBC Bank

Consensus (Mean)


Comparison ForecastsAsian Development Bank (Sep. '14)IMF (Oct. '14)

Historical Data



PrivateConsump-

tion

Gross FixedInvestment

Manufactur-ing

Production

ConsumerPrices

MoneySupply

(M3)

MerchandiseExports

(fob, US$bn)

MerchandiseImports

(fob, US$bn)

End Year, %change Annual TotalAverage % Change on Previous Calendar Year

MALAYSIA

2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015


Government and Background DataPrime Minister - Mr. Najib Razak. Government - The 14-PartyNational Front coalition, led by the United Malays National Organi-sation (UMNO), holds 133 of the 222 seats. Next Election - 2018(Parliamentary). Nominal GDP - RM986.7bn (2013). Population- 29.7mn (mid-year, 2013). Ringgit/US$ Exchange Rate - 3.149(average, 2013).

2014

* % change on previous year

Gross Domestic Product*Private Consumption*Gross Fixed Investment*Manufacturing Production*Consumer Prices*Money Supply (M3), end yr*Merch. Exports (fob, US$bn)Merch. Imports (fob, US$bn)Trade Balance (fob-fob, US$bn)Current Account Bal. (US$bn)3 mth Interbank Rate, % (end yr)Base Lending Rate, % (end yr)

2010 2011 2012 20137.4 5.2 5.6 4.76.9 6.9 8.2 7.2

11.9 6.3 19.2 8.511.1 4.5 2.9 4.21.6 3.2 1.7 2.16.8 14.3 9.0 7.3

199.0 228.6 222.1 215.6156.6 179.1 181.6 181.3

42.5 49.5 40.5 34.427.1 33.5 17.6 12.73.0 3.2 3.2 3.26.3 6.6 6.6 6.6

2015 2016

17

DECEMBER 2014


33.1 32.3 14.5 13.2 na na na na37.7 34.4 18.7 11.6 na na na na40.1 38.5 18.3 14.9 3.8 3.8 na na38.1 39.3 17.3 16.9 na na na na

na na 16.4 10.8 na na na na39.0 30.8 18.7 9.8 3.8 4.0 6.8 7.036.8 27.9 15.9 8.3 na na na na

na na 14.8 11.3 na na na na36.7 39.8 15.9 15.7 na na na na26.9 31.0 17.3 17.3 na na na na

na na 15.8 17.8 3.8 3.8 na na39.4 43.7 21.4 25.7 3.7 3.6 na na39.6 41.7 20.4 20.7 3.8 3.8 na na26.9 24.0 17.1 16.7 3.9 4.2 na na38.3 37.6 18.2 17.9 3.6 3.6 na na

na na 17.8 11.7 na na na na35.9 24.8 15.9 5.2 na na na na

na na na na na na na na

36.0 34.3 17.3 14.4 3.8 3.8 na na

35.6 35.6 17.6 17.036.1 38.3 17.5 17.840.1 43.7 21.4 25.7 3.9 4.2 6.8 7.026.9 24.0 14.5 5.2 3.6 3.6 6.8 7.04.4 6.4 1.9 5.0 0.1 0.2 na na

14.6 15.8

-10-8-6-4-202468

1012

93 95 97 99 01 03 05 07 09 11 13 15 17 19


-10-26

142230384654

93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 2.5

3.0

3.5

4.0

4.5

5.0

5.5


Rates on Survey Date6.9%

Annual Total

MALAYSIA

TradeBalance(fob-fob,US$bn)


3-monthInterbankRate (%)

Base LendingRate (%)


Singapore 14.0China 13.4Japan 11.1United States 8.1

China 16.4Singapore 12.4Japan 8.7United States 7.9



3.7%

2014 2015 2014 2015End End

Mar '15 Dec '15End End

Mar '15 Dec '15



%

Current Account Balance

TradeBalance

US$bn

ConsensusForecasts

ConsensusForecasts


%


2015 Real GDPGrowth

Forecasts (%)


Q3 Growth Slows on Weaker Exports and InvestmentAs expected, Q3 GDP data revealed much softer growththan earlier in the year as the Malaysian economy was hit byweak export demand. The economy grew by 5.6% (y-o-y) inthe three months to September, much lower than the 6.2%and 6.5% figures posted for Q1 and Q2 respectively. Growthin private consumption edged up slightly from 6.5% (y-o-y)in Q2 to reach 6.7%, driven by high consumption of food andbeverages, housing and utilities, and communication. How-ever, a sharp slowdown in export growth from 8.8% in theprior quarter to 2.8% in Q3 and a sizeable decrease in grossfixed investment (from 7.2% to 1.1%) in the same periodweighed on overall activity. In line with the slowdown seenin the annual GDP figure, Q3 growth in seasonally adjustedquarterly terms roughly halved from 1.9% in the prior threemonths to just 0.9%. That said, the central bank governor,Tan Sri Dr Zeti Akhtar Aziz, remains positive in spite of theslowdown, pointing out that the economy is on a steadygrowth path and still forecasting firm GDP growth of 5.5-6.0% for 2014 and 5.0-6.0% for 2015. For 2015, our panel'sGDP forecasts are now at the bottom end of the target range.

The government last month took the bold step of abolishingsubsidies for the RON95 grade of petrol and diesel with effectat the start of December. Prices of the popular grade of petroland diesel will be determined by a managed float mechanismwhich adjust prices according to the market rate. The movelooks set to save the authorities around RM20bn (US$6bn)per year and, in conjunction with the planned introduction ofa goods and services tax next April, should help to reducethe countrys fiscal deficit. Encouragingly, lower global oilprices are likely to limit inflationary pressures stemmingfrom the fuel subsidy removal.

18

DECEMBER 2014



December 8, 2014

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2


Consumer 1.5 1.6 1.0 1.1 1.2 1.5 1.8 2.0 2.3 2.3Prices*

Trade 2.4 1.6 -1.9 -1.1 0.0 0.3 -2.7 -1.3 0.2 0.7Balance (NZ$bn)

First NZ CapitalInfometricsUBS Oxford EconomicsHSBCBank of New ZealandJP Morgan ChaseASB BankWestpac Banking CorpDeutsche Bank NZANZ BankIHS EconomicsEcon Intelligence UnitNZIER

Consensus (Mean)


Comparison ForecastsIMF (Oct. '14)OECD (Nov. '14)Reserve Bank of New Zealand (Dec. '14)

3.6 2.7 3.1 2.9 7.4 7.6 na na 1.3 1.6 1.8 2.3 na na 5.6 5.0 50.0 53.0 51.0 56.03.6 3.2 3.0 2.9 9.3 4.5 na na 1.3 1.8 1.6 1.7 na na 5.6 5.4 50.2 50.7 49.7 56.83.6 3.0 2.9 2.9 7.7 7.6 3.0 3.0 1.3 2.0 1.7 2.3 5.5 5.0 5.5 5.0 49.0 43.1 48.1 49.13.5 3.1 3.2 2.8 10.0 7.6 na na 1.6 2.0 na na na na 5.8 5.4 na na na na3.5 3.0 3.1 3.1 8.1 7.5 na na 1.6 2.0 1.7 2.3 na na 5.7 5.2 50.7 50.9 50.0 52.93.4 3.3 3.3 3.5 9.2 5.9 2.3 3.6 1.2 1.0 1.7 2.2 6.2 7.0 5.6 5.4 50.3 49.4 48.9 50.33.4 2.8 na na 9.2 8.8 na na 1.4 1.8 na na na na 5.9 5.8 50.0 50.0 52.3 54.33.3 3.3 3.0 2.6 8.1 3.4 na na 1.3 1.5 1.6 2.1 na na 5.6 5.2 49.6 46.0 49.5 50.93.3 3.2 3.2 3.2 10.3 8.3 na na 1.3 1.7 1.6 1.9 na na 5.5 4.9 49.7 45.4 48.9 50.03.2 2.8 3.1 2.6 9.2 8.3 2.6 3.7 1.3 1.5 1.6 2.0 6.0 6.0 5.6 5.1 50.4 52.2 49.3 55.63.1 3.0 3.3 3.5 7.5 6.3 na na 1.3 1.3 1.6 2.0 na na 5.5 4.9 49.6 47.1 49.2 53.83.1 3.0 3.2 3.5 10.4 9.0 2.7 3.0 1.3 1.9 na na 6.2 8.4 5.6 5.2 50.5 53.1 50.5 56.03.0 3.0 2.8 2.4 6.9 5.3 na na 1.4 1.7 na na na na 5.9 5.6 na na na na3.0 2.3 3.0 2.2 6.1 1.9 na na 1.3 1.5 1.7 1.9 na na 5.6 5.2 52.2 53.0 49.3 51.9

3.3 3.0 3.1 2.9 8.5 6.6 2.6 3.3 1.3 1.7 1.7 2.1 6.0 6.6 5.6 5.2 50.2 49.5 49.7 53.1

3.5 3.0 3.0 2.9 8.8 7.1 3.0 3.2 1.4 1.8 1.6 2.1 6.2 7.1 5.6 5.3 49.4 49.7 49.1 53.43.5 3.0 2.9 2.9 9.4 7.3 3.5 3.4 1.5 2.1 1.8 2.4 6.3 7.6 5.6 5.3 52.8 52.8 51.1 55.33.6 3.3 3.3 3.5 10.4 9.0 3.0 3.7 1.6 2.0 1.8 2.3 6.2 8.4 5.9 5.8 52.2 53.1 52.3 56.83.0 2.3 2.8 2.2 6.1 1.9 2.3 3.0 1.2 1.0 1.6 1.7 5.5 5.0 5.5 4.9 49.0 43.1 48.1 49.10.2 0.3 0.2 0.4 1.3 2.1 0.3 0.4 0.1 0.3 0.1 0.2 0.3 1.4 0.1 0.3 0.8 3.4 1.1 2.7

3.6 2.8 1.6 2.0 5.7 5.23.2 3.0 3.2 3.4 7.1 6.6 1.2 1.3 5.6 5.4

3.8 2.9 3.0 3.6 8.5 8.8 1.4 1.6 1.8 2.1 5.5 5.0

Historical Data

NEW ZEALAND

Average % Change on Previous Calendar Year Annual Total

GrossFixed

Invest-ment

Manufac-turing

Product-ion

LabourCostIndex

Unem-ploymentRate (%)

End Year,% change

Merchan-dise

Imports(fob,

NZ$bn)

MoneySupply

(M3)

Merchan-dise

Exports(fob,

NZ$bn)

YearAverage



PrivateConsump-

tion

Government and Background DataPrime Minister - Mr. John Key (National Party). Government - TheNational Party won 60 of the 121 seats at the September 2014 electionand has formed a coalition with the ACT party, United Future party andMaori party. Next Election - 2017 (Parliamentary). Nominal GDP -NZ$221.29bn (2013). Population - 4.5mn (mid-year, 2013). US$/NZ$Exchange Rate - 0.820 (average, 2013).


Con-sumerPrices

* % change on previous yearGross Domestic Product*Private Consumption*Gross Fixed Investment*Manufacturing Production*Consumer Prices*Labour Cost Index*Money Supply (M3), end yr*Unemployment Rate (%)Merch. Exports (fob, NZ$bn)Merch. Imports (fob, NZ$bn)Trade Balance (fob-fob, NZ$bn)Current Account Bal. (NZ$bn)Govt Operational Bal. (NZ$bn)**90 day Bank Bills, % (end yr)10 Yr Govt Bond, % (end yr)

2010 2011 2012 20131.4 2.1 2.9 2.63.2 2.3 2.7 3.20.2 4.0 7.2 9.84.2 2.3 1.8 0.92.3 4.0 1.1 1.1

-7.5 1.9 1.9 1.73.2 6.5 6.0 5.86.5 6.5 6.9 6.2

44.0 48.2 46.5 48.441.1 45.4 46.4 47.2

2.9 2.9 0.1 1.2-4.6 -5.9 -8.5 -7.4

-18.4 -9.2 -4.4 -2.93.2 2.7 2.7 2.85.9 3.8 3.6 4.7

2014 2015

2014 2015 2014 2015 2014 2015 2014 2015 20142015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015

**Data are for fiscal years beginning in July and ending in the followingJune (i.e. 2013 = July 2013 to June 2014, corresponding to FY13/14).

2016

19

DECEMBER 2014



-18-14-10-6-226

93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15

-1.0 -3.0 -10.0 -15.0 -1.0 1.5 3.8 4.0 4.4 4.90.5 -6.2 -9.4 -17.5 1.0 1.4 3.7 4.3 4.4 4.70.9 -6.0 -8.4 -15.7 -0.1 0.3 3.8 4.3 4.7 5.0na na -6.6 -9.6 -0.7 1.0 3.1 4.0 4.4 4.90.7 -2.0 -7.0 -11.1 0.2 0.8 3.9 4.8 4.3 5.01.4 -0.9 -8.4 -11.0 0.1 1.0 3.7 4.2 4.0 4.5

-2.3 -4.3 -12.0 -19.0 0.5 na 3.8 4.2 4.2 4.20.1 -4.9 -9.4 -14.9 0.3 0.8 3.7 4.0 4.5 4.70.7 -4.6 -8.6 -15.4 0.3 0.8 3.7 4.3 3.9 4.51.1 -3.4 -8.2 -13.2 -0.4 0.6 3.7 4.2 4.3 4.50.4 -6.7 -8.5 -14.0 -0.2 0.1 3.8 4.2 4.4 4.60.0 -2.9 -9.6 -15.0 na na na na na nana na -10.5 -12.2 na na na na na na2.9 1.2 -6.9 -8.0 -0.9 1.3 3.7 4.2 4.9 5.5

0.5 -3.6 -8.8 -13.7 -0.1 0.9 3.7 4.2 4.4 4.8

0.3 -3.7 -8.8 -14.2 0.1 0.81.7 -2.4 -8.1 -13.0 0.3 1.52.9 1.2 -6.6 -8.0 1.0 1.5 3.9 4.8 4.9 5.5

-2.3 -6.7 -12.0 -19.0 -1.0 0.1 3.1 4.0 3.9 4.21.3 2.3 1.5 3.1 0.6 0.4 0.2 0.2 0.3 0.3

-7.0 -15.4 -0.4 0.8 3.9 4.3

NEW ZEALAND

Rates on Survey Date3.7% 3.9%

Annual Total Fiscal YearsJuly - June

GovernmentOperational

Balance(OBEGAL)

(NZ$bn)

90-dayBank BillRate (%)

10 YearGovernmentBond Yield

(%)

TradeBalance(fob-fob,NZ$bn)

CurrentAccountBalance(NZ$bn)


China 17.5Australia 13.3United States 9.4Japan 6.4



China 20.8Australia 19.0United States 8.5Japan 5.9

FY FY14/15 15/162014 2015 2014 2015


1.6

1.8

2.0

2.2

2.4

2.6

2.8

3.0

3.2


-3

-1

1

3

5

7

93 95 97 99 01 03 05 07 09 11 13 15 17 19

Real GDP Growth and Inflation%

Current AccountBalance

TradeBalance

NZ$bn

ConsensusForecasts

ConsensusForecasts


%


2015 Real GDPGrowth

Forecasts (%)



End EndMar'15 Dec'15

Falling Dairy Prices Hit ExportsNew Zealand's trade balance for the year ended Octoberamounted to a deficit of NZ$107mn after a monthly shortfallof NZ$908mn in October pushed the annual trade balanceinto the red. Imports continued to surge as domestic demandremained strong, registering annual growth of around 12.0%to total NZ$4.9bn, with capital goods such as aircraft andhelicopters fairing particularly well. Exports, by contrast, fellby 5.1% (y-o-y) to reach NZ$4.0bn as dairy products such asmilk powder, butter and cheese continued to slide. Afterexperiencing a minor recovery during mid-October, globaldairy prices have tumbled once again. The Global DairyTrade Price Index fell by 1.1% during the two week periodbetween November 18 and December 2 to hit a new five-yearlow. A pick up in prices is unlikely to occur any time soon andthis will probably continue to have a negative knock-on effecton the overall economy going into the new year.

In a bid to address a nationwide skills shortage, the NewZealand government is holding job fairs in neighbouringAustralia with a view to luring Kiwi expats back to their nativehomeland and at the same time encouraging competentAustralian labourers to emigrate to New Zealand. Withunemployment falling to its lowest level since 2008 and therecently elected government looking to create 50,000 newjobs over the next two years, employment minister StevenJoyce is seeking to reverse the recent trend of net migrationfrom New Zealand to Australia. The campaign is looking forprospective employees across a number of different fieldsincluding construction, engineering and manufacturing inorder to boost the countrys future growth potential, NewZealands population is projected to grow annually by 1.4-1.8% between 2014 and 2016.

20

DECEMBER 2014


Goldman Sachs AsiaCitigroupEcon Intelligence UnitBanco De Oro UnibankANZ BankBarclays CapitalBofA - Merrill LynchDeutsche BankDun & BradstreetHSBC EconomicsIHS EconomicsIDEANomuraUBSOxford EconomicsINGMetrobankMoody's AnalyticsFERICredit SuisseJP Morgan Chase

Consensus (Mean)


Comparison ForecastsAsian Development Bank (Sep. '14)IMF (Oct. '14)

6.5 6.0 5.3 5.3 5.7 3.9 na na 4.4 3.0 22.6 12.2 70.2 75.36.3 6.5 6.0 6.2 na na na na 4.3 3.5 na na 46.1 48.66.3 6.2 5.8 5.9 9.4 8.6 8.1 7.0 4.4 4.1 na na 52.3 59.16.3 6.8 5.6 5.8 10.9 10.3 na na 4.3 3.9 na na na na6.0 6.1 5.4 4.6 8.6 9.4 na na 4.3 3.3 15.0 13.0 58.0 na6.0 6.5 5.4 5.9 8.5 9.7 na na 4.2 3.5 na na na na6.0 6.1 na na na na na na 4.3 3.8 na na 54.8 58.15.9 6.5 5.7 6.4 8.5 6.4 9.4 12.8 4.3 3.5 9.9 11.0 46.7 51.45.9 5.6 5.1 5.0 8.0 8.0 na na 4.4 3.5 na na 60.0 70.05.9 6.1 5.6 5.4 10.4 2.9 8.4 8.0 4.3 3.9 7.0 7.0 46.5 50.25.9 6.2 5.5 5.2 8.7 6.2 6.4 6.0 4.3 4.0 15.8 14.5 na na5.9 5.7 5.4 4.9 na na na na 4.4 4.4 na na na na5.9 6.6 5.7 6.2 10.5 14.4 na na 4.3 3.7 na na 61.8 64.95.9 6.0 5.4 5.5 8.4 5.4 na na 4.3 3.7 na na na na5.9 6.0 5.5 5.9 8.3 7.9 8.9 10.0 4.3 3.7 4.8 2.7 63.4 64.55.8 6.8 5.4 5.2 13.1 11.2 7.9 7.4 4.4 3.8 29.1 11.0 51.9 55.75.8 6.0 na na na na na na 4.3 3.7 na na 56.0 60.05.7 6.4 5.6 6.0 7.0 7.7 6.4 7.0 4.3 3.0 22.0 4.0 na na5.7 5.8 5.3 5.1 9.6 7.7 7.1 7.5 4.3 3.9 na na 49.3 52.95.7 5.5 5.4 4.8 8.6 7.1 7.4 6.4 4.3 3.7 15.0 13.0 na na5.5 5.4 na na 6.0 10.0 na na 4.3 2.2 25.0 10.0 59.7 65.2

5.9 6.1 5.5 5.5 8.8 8.0 7.8 8.0 4.3 3.6 16.6 9.8 55.5 59.7

6.2 6.2 5.4 5.4 8.4 8.7 8.3 8.2 4.3 3.7 19.2 11.0 55.0 60.16.3 6.3 5.5 5.4 10.0 10.3 8.2 8.4 4.4 3.9 15.6 10.4 55.1 60.46.5 6.8 6.0 6.4 13.1 14.4 9.4 12.8 4.4 4.4 29.1 14.5 70.2 75.35.5 5.4 5.1 4.6 5.7 2.9 6.4 6.0 4.2 2.2 4.8 2.7 46.1 48.60.2 0.4 0.2 0.5 1.8 2.8 1.1 2.1 0.1 0.5 8.0 4.0 7.2 8.0

6.2 6.4 4.4 4.16.2 6.3 4.5 3.9


December 8, 2014

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2


Consumer 4.1 4.4 4.7 4.0 3.7 3.9 3.7 4.0 4.1 4.0Prices*

Manufacturing 3.5 12.2 5.9 8.6 7.7 8.5 8.9 8.5 8.8 8.6Production*

Historical Data

Average % Change on Previous Calendar Year End Year,% change

PHILIPPINES

GrossDomestic

FixedCapital

Formation

MerchandiseExports (fob,

US$bn)

Manufac-turing

ProductionVolume

ConsumerPrices

MoneySupply

(M3)Gross

DomesticProduct

Annual Total



PersonalConsump-

tionExpendi-

ture

2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015

President - Mr Benigno Aquino III (Liberal Party of the Philippines). Govern-ment - Benigno Aquino III was elected as president with over 40% of the votes.His Liberal Party has 75 members in the House of Representatives, of whom22 defected from the Lakas-Kampi-CMD coalition. Next Election - 2016Presidential, legislative and local elections. Nominal GDP - Peso 11548.2bn(2013). Population - 98.4mn (mid-2013). Peso/US$ Exchange Rate - 42.44(average, 2013).

2014 2015

* % change on previous yearGross Domestic Product*Personal Consumption Exp*Gross Domestic Fixed Capital

Formation*Manufacturing Production*Consumer Prices*Money Supply (M3), end yr*Merch. Exports (fob, US$bn)Merch. Imports (fob, US$bn)Trade Balance (fob-fob, US$bn)Current Account Bal. (US$bn)

91-Day T-bill Rate, % (end yr)

2016

Government and Background Data

2010 2011 2012 20137.6 3.7 6.8 7.23.4 5.6 6.6 5.7

19.1 -1.9 10.8 11.923.2 1.1 7.7 14.0

3.8 4.7 3.2 2.910.0 7.1 9.4 31.836.8 38.3 46.4 44.553.6 58.7 65.3 62.2

Trade Balance (fob-fob, US$bn) -16.9 -20.4 -18.9 -17.77.2 5.6 6.9 10.40.8 1.6 0.2 0.0

21

DECEMBER 2014


82.1 89.7 -11.9 -14.4 11.2 11.1 na na63.5 67.3 -17.4 -18.7 12.3 13.4 na na72.3 79.4 -20.0 -20.3 7.4 8.5 na na

na na na na 8.8 8.3 na na75.5 na -17.5 na 8.8 na na na

na na na na 12.5 16.7 na na62.9 66.1 -8.1 -8.0 8.5 8.0 na na63.5 71.3 -16.8 -19.9 12.8 12.6 1.8 2.780.0 88.0 -20.0 -18.0 9.0 9.0 na na66.6 73.5 -20.1 -23.3 9.5 8.5 1.8 1.8

na na na na 13.4 15.8 na nana na na na na na 1.8 2.2

64.8 70.2 -3.0 -5.3 9.9 8.8 na nana na na na 10.6 14.4 na na

72.5 76.4 -9.1 -11.9 12.3 12.6 na na70.5 76.5 -18.7 -20.8 10.3 9.4 2.0 3.168.0 75.0 -12.0 -15.0 9.2 9.5 na na

na na na na na na na na64.2 67.3 -14.9 -14.4 10.4 9.5 na na

na na na na 12.4 13.3 na na79.2 83.1 -19.5 -17.9 8.8 10.2 na na

70.4 75.7 -14.9 -16.0 10.4 11.1 1.8 2.5

71.0 77.8 -16.0 -17.7 10.4 10.571.5 78.2 -16.4 -17.8 9.3 9.482.1 89.7 -3.0 -5.3 13.4 16.7 2.0 3.162.9 66.1 -20.1 -

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