Moody's Corporation · NYSE:MCO
Moody's — APAC Webinar December 2023
25 slides from Moody's's conference presentation, December 2023
Slide 1: APAC Economic Outlook: Looking Forward to Looking Back
APAC Economic Outlook: Looking Forward to Looking Back Steve Cochrane, Chief APAC Economist; Katrina Ell, Director—Economic Research; December 2023 Stefan Angrick, Senior Economist; Harry Murphy Cruise, Economist APAC Economic Outlook 1
Slide 2: Agenda
Agenda 1. Current Conditions 2. 2024 Outlook 3. Risks 4. Q&A Moody’s Analytics MOODY’S PresentationAPAC Title, Economic Month 2022 Outlook 2
Slide 3: Current Conditions: Tepid Enthusiasm
Current Conditions: Tepid Enthusiasm Moody’s Analytics APAC Economic Outlook 3
Slide 4: Still Below Peak, But Global Trade and IP Are Improving
Still Below Peak, But Global Trade and IP Are Improving Global trade and industrial production, volume basis, 2010=100 140 Delta & Omicron waves 135 130 125 120 China final zero- Invasion of Ukraine Covid lockdowns 115 & China lockdowns 110 Jan 2020: COVID-19 105 100 19 20 21 22 23 Merchandise world
Slide 5: Green Shoots of Growth
Green Shoots of Growth Nominal goods exports, $, 3-mo MA, % change yr ago 50 40 30 20 10 0 -10 -20 21 22 23 Japan S. Korea Taiwan Singapore China Thailand Vietnam Sources: National statistical offices, Moody’s Analytics Moody’s Analytics APAC Economic Outlook 5
Slide 6: U.S. Inflation Heads Back to Central Bank's Target
U.S. Inflation Heads Back to Central Bank’s Target U.S. consumer price inflation, % change yr ago, Nov baseline forecast 9 8 Omicron wave Oil prices fall 7 Delta Russia invades wave Ukraine Supply chains ease 6 Massive fiscal support 5 Vehicle prices roll over 4 Vaccine rollout Housing costs slow 3
Slide 7: Stable Energy Outlook, but Risks Abound
Stable Energy Outlook, but Risks Abound Brent crude, $ per bbl, Nov 2023 forecast 120 Forecast 110 100 90 80 70 60 50 40 30 20Q1 20Q3 21Q1 21Q3 22Q1 22Q3 23Q1 23Q3 24Q1 24Q3 25Q1 25Q3 26Q1 26Q3 Baseline S6: High oil price scenario Source: Moody’s Analytics Moody’s Analytics APAC Quarterly Economic B
Slide 8: Food Inflation Is Proving Sticky
Food Inflation Is Proving Sticky % change yr ago, CPI, ppt contribution by component, Developed Asia (L), ASEAN-5 (R) 5 7 6 4 5 3 4 3 2 2 1 1 0 0 -1 -1 -2 20 21 22 23 20 21 22 23 Food Fuels and transport Food Fuels and transport Housing and durables Other Housing and durables Other CPI CPI Sources:
Slide 9: Currency Weakness Is Still a Concern
Currency Weakness Is Still a Concern % change in exchange rate (local currency/$) Japan Indonesia Vietnam Taiwan Thailand Malaysia Depreciation against $ China India New Zealand 0 1 2 3 4 5 6 7 8 Vs. 6 mo ago Sources: Federal Reserve, Moody’s Analytics Moody’s Analytics APAC Economic Outlook 9
Slide 10: Weak Yen Creates Dilemma for Bank of Japan
Weak Yen Creates Dilemma for Bank of Japan % 1.0 0.8 0.6 0.4 Forecast 0.2 0.0 -0.2 -0.4 -0.6 21 22 23 24 25 10yr government bond yield YCC yield target YCC limits YCC reference rates Short-term policy rate Sources: Bank of Japan, Moody’s Analytics Moody’s Analytics APAC Economic Outlook 10
Slide 11: Outlook 2024
Outlook 2024 Moody’s Analytics APAC Economic Outlook 11
Slide 12: A Heterogeneous Bunch
A Heterogeneous Bunch Real GDP, % change, Nov baseline, ranked by 2024 growth 8 7 6 5 4 3 2 1 0 PHL IND MYS CHN IDN THA HKG TWN KOR SGP NZL AUS JPN 2023F 2024F Sources: National statistical offices, Moody’s Analytics Moody’s Analytics APAC Economic Outlook 12
Slide 13: China's Households Slowly Gaining Confidence
China’s Households Slowly Gaining Confidence Household saving rate, % Retail sales, % change yr ago 40 40 22Q4 38 lockdowns 30 Initial 2020 lockdowns 36 20 34 10 32 0 30 -10 28 Easing of -20 2023 restrictions reopening 26 in 2021 -30 13 14 15 16 17 18 19 20 21 22 23 18 19 20 21 22 23 Sources: China
Slide 14: Chinese Firms Lifting Production…
Chinese Firms Lifting Production… Industrial production and services output, real, % change yr ago 40 30 20 10 0 -10 -20 17 18 19 20 21 22 23 Industrial production Services output Sources: China National Bureau of Statistics, Moody’s Analytics Moody’s Analytics APAC Economic Outlook 14
Slide 15: …But Not Yet Willing to Ramp Up Investment
…But Not Yet Willing to Ramp Up Investment China’s fixed asset investment, YTD, % change yr ago 45 30 15 0 -15 -30 18 20 22 State-owned enterprises Private firms Sources: China National Bureau of Statistics, Moody’s Analytics Moody’s Analytics APAC Economic Outlook 15
Slide 16: China's Real Estate Woes
China’s Real Estate Woes Real estate measures, % change from peak 0 -20 -40 -60 X-axis=mo since peak -80 0 5 10 15 20 25 30 35 Starts m² Sales m² Investment, CNY bil Loans to property developers Sources: China National Bureau of Statistics, Moody’s Analytics Moody’s Analytics APAC Economic Outlook 1
Slide 17: Global Electronics Cycle Is Turning Around
Global Electronics Cycle Is Turning Around Global semiconductor billings, $ bil, 3-mo MA, SA by Moody’s Analytics 55 50 45 40 35 30 25 20 15 10 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Worldwide sales Downturn Recovery Expansion Sources: SIA, Moody’s Analytics Moody’s Analytics APAC Economic
Slide 18: India's Untapped Potential
India’s Untapped Potential India real GDP, % change yr ago Labor force participation rate, select economies, % 12 80 10 70 8 60 6 4 50 2 40 0 -2 30 -4 20 -6 China India Indonesia Philippines Vietnam -8 10 2000 2010 2020 2030 2040 1990 2000 2010 2020 Sources: Ministry of Statistics and Programme Impl
Slide 19: Risks
Risks APAC Economic Outlook 19
Slide 20: Inbound Arrivals From China Still Have Some Ways to Go
Inbound Arrivals From China Still Have Some Ways to Go Oct 2023, % of Oct 2019 arrivals Hong Kong Japan New Zealand Australia S. Korea Singapore Indonesia Thailand Vietnam Taiwan Australia and New Philippines Zealand are Sep figures 0 10 20 30 40 50 60 70 80 90 100 110 Total arrivals Arrivals from C
Slide 21: Foreign Investment in Retreat
Foreign Investment in Retreat Quarterly direct investment liabilities, China, $ bil 120 100 80 60 40 20 0 -20 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Sources: China State Administration of Foreign Exchange, Moody’s Analytics Moody’s Analytics APAC Economic Outlook 21
Slide 22: Global Geopolitical Risk Events
Global Geopolitical Risk Events Date Country Event Economic Importance Financial Market Risk 13-Jan Taiwan Presidential election Medium Medium 14-Feb Indonesia General election (including presidential election) Low Low Two Sessions (meetings of China's top legislative Mar China High Medium body and
Slide 23: Q&A
Q&A APAC Economic Outlook 23
Slide 24: Contact Us: Predictive Analytics - Economics Offices
Email: helpeconomy@moodys.com Contact Us: Predictive Analytics - Economics Offices Singapore +65.6511.4400 6 Shenton Way #14-08 OUE Downtown 2 Singapore 068809 King of Prussia, Economics-HQ New York, Corporate-HQ London Prague +1.610.235.5299 +1.212.553.1653 +44.20.7772.5454 +420.234.747.505 Sydney
Slide 25: Moody's Analytics
© 2023 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or “MOODY’S”). All right