the generals in control, the economy could be a long campaign. stays the course, policymakers are asking if easing has gone too far. and the jump start, this is one thing the market did not see coming. hello, you're watching a"asa biz forecast."

we're chris crossing the region looking for investors. those on fire and those misfiring. officials in thailand, singapore and japan have just released gdp results for 2014. our tour starts in thailand, a performer with a volatile record. last year's political strike did nothing to change that roller coaster image. the latest data suggests a recovery is underway, but it's still looking shaky. thai officials released the latest results for gross domestic product on monday. they showed a broad based recovery. gdp grew 2.3%, compared to the same period in the previous year. exports expanded for the first time in four quarters thanks to improved orders for electrical appliances and auto-related products. outbound shipments grew by 4. 9%. manufacturing, construction and hotel and restaurants turned in

the biggest contributions. these sectors returned positive growth for the first time in more than a year. the number of inbound tourists saw a 7% recovery. they had stayed away earlier in the year because of the political turmoil. agriculture was one area weighing down on the economy. however, farming contracted 1.6%. the prime minister ceased power in may. in october, five months after leaving, he rolled out an $11 billion stimulus package but this week's data shows those measures failed to make up for the slowdown in the first half of last year. the economy posed a .7% growth for the full year, the worst figure in three years. government officials see further challenges ahead. they have trimmed half a point from export growth in 2015.

for the overall economy, they are sticking to their original forecast. >> translator: we do see signs of economic recovery. we can expect gdp to grow 3.5 to 4.5% for this year. >> to shed more light on where thailand's economy is headed, we have an economist with may bank. great to have you back on our program again. let's start with exports because it accounts for about two-thirds of thailand's economic output. exports posted positive growth for the first time in four quarters. do you think this positive momentum will continue? or do you see any challenges ahead if for thai's export industries? >> okay, yes, i think exports

pick up more in the first half this year, both. agricultural and industrial product exports. and yes, we see changes. weaker external damage, especially china, 10% of total exports and also with electronics related products accounting 20% of total exports now losing competitiveness to meet the growing global smart phone and tablet market. originally it produced its own vehicles to meet its demand and cut exports for thailand likely be lowered. finally talks between the eu and thailand on a free trade agreement having been suspended due to the political difference and negotiations to resume in thailand we saw democracy. >> many investors in thailand shied away from investing

because of the political turmoil. do you still see political risk that could affect the economy in a negative way? >> well, yeah, with marshal law in place expected throughout the year, impeachment charges against former lawmakers and controversial amnesty issue, we see risks could not be ruled out and this could effect private investment, which is one of the country's driving forces through confidence. >> it to prop up the economy strank banks around the world are taking monetary easing policies. do you see that happening with the central bank in thailand? >> well, at the moment with recovery improving in the final quarter of last year, we do not think thailand will follow the global central bank's trend. government spending is a more

effective tool to boost growth than lower interest rates. keep the policy rate at 2% at the monetary policy committee meeting on the 11th of march. >> lastly, what is your prospect for thailand's economy this year? >> the first quarter of this year we expect for the whole year private expected to be the driving force while we start to make that investments are coming into play, but not high. after all we make our growth forecast of 4%. >> gdp is growing much faster than first thought. singapore had been bracing for a

sharp slowdown in the three months ending in december, but final count shows expanded and annualized 4.9% from the previous quarter. that's a significant improvement on last month's estimate of 1.6% gain. manufacturing shrank 2.5%. the back figure is less than half the contraction officials had been expecting. . at the same time the service sector grew faster than first thought helping to offset the slowdown in factory activity. officials sounded a cautious note that warn economic outlook has softened in recent months. they decided to maintain their growth forecast between 2 and 4%. where the economy remains weak, derailed the recovery program. analysts say expecting a rebound

at the end of last year while their average forecast was 3% growth. the final number came in almost a point under the average forecast. japan's gdp grew at an annualized rate in the fourth quarter of 2014. that followed two quarters of negative growth technically a recession. private consumption figures failed to impress yet again. consumer spending accounts for about 60% of the economy. the shoppers had yet to recover. household spending has risen for two straight quarters. consumer spending is not weak in all areas. shoppers are still opening their wallets for valued brands. high resolution portable audio is one example. this market is growing 1.5 times in the last year. the players are not cheap.

the models cost around $1,000. >> translator: they are selling very well. the music lovers among our customers will be very satisfied with our product line. the sales tax hike has pushed up prices. people are looking for bargains. >> translator: it's not easy on cold winter days but i come to save money. >> i'm doing all i can to avoid wasting money. >> one brighter spot for the japanese economy is exports. manufacturers are shipping more goods to the u.s. and asia thanks to the weaker yen. external demand boosted growth by 2%. this venture business in tokyo is one company benefitting.

managers wanted to focus on the growing consumer markets. until recently that was difficult because exporting wasn't profitable. but the weaker yen means it can compete with local venn tor dors. they are scrambling to sign contracts while the going is good. >> translator: by actively marketing our products now, we hope to expand our export business. eventually we hope to be able to withstand a fluctuation and exchange rates. >> japan's capital investment improved last quarter only just so. the .1% growth was since last april. the weaker yen was a contributing factor. this component company makes screws. it sells them to manufacturers of household appliances and

machine tools. the company invested more than $400,000 to install new machinery. domestic orders are up 20% as clients ship back to japan to take advantage of the cheaper yen. managers are optimistic but cautious. they say they will be keeping a close eye on exchange rates. >> translator: we can't predict if the yen will further weaken or start rising, so we have to seize this opportunity to strengthen our domestic business. ready to withstand any exchange rate fluctuations. >> while factory managers were te testing the water, home buyers continue their retreated at end of 2014. housing investment slipped down another point making it three

consecutive quarters of decline. an economist at ihs joins me now for what those gdp figures mean for the japanese economy. it marked half a year since the sales tax hike, but consumption grew just .3%. what is needed to convince people to loosen their pursestrings and spend more? >> well, it's the key for consumer spending. the other is you must look at earnings. and among them only increased. this is difficult for consumers to make confident to increase consumer spending.

the consumers sentiment has started to pick up that the rate increase is low expectations. >> looking at companies, capital investment grew .1%. do you think this positive trend will continue? >> the private machinery orders and also manufacturers fiscally increase bigger investment next quarters. that said, the recovery of investments is likingly for the coming year. >> what about long-term? do you think companies will start investing in japan again? >> i don't think a trend that is going to be changed.

investment started to shift in some extent to japan because they started to increase in production in domestic production. however, this was not increase enough to invest because domestic demand is going to be shrink because of the democratic reasons and also becoming the issue for labor shortages. >> so for companies overseas markets is more attractive than here in japan. what about your prospects for 2015 bye-bye how do you look at japan's economy? >> we expect japan economy to be more growth in 2015. our focus is this year.

the global economy 2.7% in 2014 and the increase in 2015. export adds to that growth. the shift from the production to domestic production will contribute to some extent. >> please stay. i want your view on our focus report that's coming up next. >> all right. one man taking a close look at japan's gdp numbers this week was the governor. he's a person responsible for putting economics by launching an ultraeasing monetary policy.

two years later people are starting to ask if the central bank's policies are helping or hurting the economy. boj board members met for their regular review of policies. after a two-day discussion they voted to leave their easing measures unchanged. explaining that decision, the boj governor said domestic production and exports are recovering. he said this was evidence the central bank's policy is working. >> translator: aside from gdp growth, various economic indicators show that capital investment is recovering. quantity tative and qualitative easing have shown early signs of effectiveness. >> the economy is showing a moderate recovery but not all

the data support that claim. prices are barely rising excludeing the impact of last year's sales tax hike the inflation rate is .5%, well short of the central bank's target of 2%. he remains upbeat. he said the economy will recover once they believe japan has pulled out of deflation and prices continue to rise. growth improved last quarter because inflation was held in check by falling oil prices. a bloomberg report claims colleagues at the boj share that opinion. the report said these policymakers think further easing would be counter productive, hurting consumer sentiment. that report got the markets moving. the yen strengthened to 120. but some didn't agree that further easing would be bad for

the economy. >> absolutely do not believe it was counterproductive. a weak yen has both positive and negative effects on various sectors of the economy. additional easing will not be counter productive for the economy as long as the exchange rates reflect economic fundamentals and move in a stable manner. >> the governor said, as we saw in the report, that monetary easing is not hurting the economy. what's your opinion on bank of japan's monetary easing policy to achieve its inflation target of 2%? >> under the circumstances, it is too weak. probably not effective enough. and the weak demand probably

hard for the company too because they cannot transfer the cost. it doesn't mean it's going to increase the pressure. >> you just mentioned real wage increases. do you see any time soon those real wages going up? >> well, two factors probably support the wage increase. one is the labor demand. the second is labor shortages. if these two factors have companies to consider increase even part-time job wages they will also increase the full-time workers. however, the trend is weak because. the company is not easy to increase continuously because nobody think it continue forever

and that probably change some time then it's not easy for the companies to change the policy or to lower the wage increase. >> so when do you think the real wage will grow positively? >> first thing that's needed is demand to increase. the demand is going to be to increase the expectations that's improved for inflation. >> inflation and expectations. in the beginning, he was saying that the boj will achieve the target of 2% inflation expectations will come back in two years. that's like march this year. but in january he again announced that he will push the dead line one year.

the dead line is now march next year of 2016. what's the possibilities of the boj achieve iing that target by march 2016? >> i expect it's difficult for the bank of japan to reach the target of 2% by the end of march 2016 because the domestic demand is still weak. and also the gap is still allowed 2% of gdp more than gross rate. proper not enough to balance the gap. it's going to be -- at the time of march 2016. >> will the bank of japan ever reach that target, do you think? >> it probably takes longer. when they started the policy,

nobody expected oil prices going down so far. and this is in short-term going to be consumer prices, but in long-term it's going to be increasing by purchasing power and also good for the profit. it's contributing to gross rate and probably going to increase. >> so eventually the target will be reached. >> it's not enough for 2016. >> thank you so much. we leave japan, but hardly a week goes by with someone, somewhere taking steps to losing credit. the latest is indonesia. the central bank there carried out its first rate cut in three years. bank indonesia made a surprise move on tuesday lowering its key interest rate to 7.5%.

consumer prices rose at a slow pace in january held back by falling oil prices. that gave policymakers room to move. central bank officials are clearly worried about what's happening to the economy. foreign trade fell sharply last month. that's in bound and outbound. exports declined 8% while imports dropped 16%. southeast asia's largest economy grew 5.02% last year. a pretty good pace for many other companies but not ind n r indonesia. it was the slowest expansion in five years. faced with slowdown, bank indonesia is pulling on all levers to revive growth. central bank officials predict the economy will gain momentum growing 5.8%. they also think inflation will remain under control ranging

from 3-5%. policymakers at bank of korea met on the same day. they left their key rate unchanged. their rate is sitting at a record low of 2%. this marks the fourth straight month the bank decided to stay the course. central bank governor is guarded about the economic outlook. asked if he's as optimist k as he was in january, he said he needs more time to think. that's got many in the market speculating. there's talk bank of korea will move to trend its policy rate in the near future. for a look at other stories making headlines around the region, we start with the postal company sealing a deal in australia. >> officials from japan post say they have agreed to buy freight toll holdings. it's valued at $5 billion. toll has an extensive distribution network that stretches around the world.

>> translator: i hope this will help us expand our business in asia, europe and north america. we want to use more acquisitions and investments to become a leading player in the distribution field. >> they plan to go public later this year. china's real estate market remains sluggish. hou housing prices in most major cities dropped again last month. officials said the price of new homes fell in 64 of 70 cities surveyed, compared to 66 in december. it's the ninth straight month the cost of homes dropped in a majority of cities. but the market is showing signs of bottoming out. prices were flat in shanghai and those in beijing were down by .1%. analysts say stimulus measures put in place last year have attracted some home buyers, but

inventories remain high raising concerns about the outlook for the overall economy. officials in india released key inflation figures for january. they say wholesale prices fell compared to the same month last year and saw their biggest year on year drop since june 2009. the decline was led by a fall in the cost of oil. prices in the fuel and power sector dropped by 2.5% compared to december. the consumer price index tells a different story. it shows that inflation stood at a little over 5% for the month, that's up slightly from december. before we go, let's get a check on what's happening in the week ahead. on monday negotiators from japan and the eu sit down to discuss an economic partnership agreement. they have scheduled five days of talks. the two sides are hoping to agree on a free trade pact by the end of the year. tuesday is a major turning point

for toyota. the first hydrogen vehicle will roll off the assembly line. . they plan to make 700 of the hydrogen-powered cars in the first year. company officials say they have already received 1,500 orders. the next day hsbc comes out with its purchasing managers index. this is the reading on manufacturing activity in february. the gauge showed a contraction in january for the second straight month. japanese officials will be posting the consumer price index on friday. we'll see if the bank of japan gets any closer to its 2% inflation target. as we saw earlier, falling oil prices are making that difficult. the 2015 budget is announced on saturday. it's expected to include tax incentives for the manufacturing sector. that's all for this week on

"asia biz forecast". for the rest of the team, thanks for watching and have a great weekend.x0

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