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Asia Pacific Economic OutlookJanuary 2014

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THE third quarter proved a mixed bag for Australia—eventful politically, but less so on the economic front. The September elec-tions brought to power the Liberal-National coalition under the leadership of Tony Abbott. September also brought to a close another quarter of disappointment for the economy. Growth slowed as domestic and international demand remained downbeat, and the central bank’s outlook for the rest of the year only added to the gloom. Meanwhile, amid cooling global commodity prices, Australia is rethink-ing its substantial reliance on mineral exports and looking to diversify into other avenues for growth. On the whole, the new government has its work cut out and not a moment to lose.

Lackluster growth, with a sharp recovery unlikely

The news for Australia in the third quarter was disheartening, as year-over-year growth came in at 2.3 percent, which was slower than in Q2 2013. Quarter-on-quarter growth of 0.6 percent also lagged that of the previous quar-ter. Economic activity has been weighed down by sluggish consumption (figure 1), which grew a modest 1.8 percent year over year, while investments fell 1.2 percent. Exports expanded a robust 6.1 percent year over year, but this was still slower than the growth rate of Q2. Sector-wise, losses in manufacturing and utilities partially offset gains in mining and services to limit growth. Manufacturing and utilities

AustraliaNew leadership, old challenges

By Navya Kumar

2 | Asia Pacific Economic Outlook

shrank 1.9 percent and 4.6 percent respectively, even as mining expanded 7.7 percent and ser-vices grew approximately 2.7 percent.

Prospects for the rest of year are not promising either. While private consumption is expected to remain subdued, government expenditure and investments are likely to decelerate sharply compared with the pre-vious year. Furthermore, cooling demand from major trade partners, especially China, could affect exports. As a result, in August the Reserve Bank of Australia (RBA) lowered its growth forecast for the year ending December 2013 to 2.25 percent from the 2.50 percent previously projected.

Consumer spending worrisome, but RBA’s options limited

Accounting for more than half the country’s GDP, private consumption is the backbone of the Australian economy. However, of late this segment has also been a major source of concern. Year-over-year growth in consumer spending has lost pace markedly in the past three quarters, averaging just 1.7 percent, the lowest since late 2009. Several factors are

constraining private consumption, includ-ing weak labor market conditions (figure 2) and high debt levels. Unemployment rates have gone up since early 2011 and in Q3 2013 averaged 5.7 per-cent—a level last seen four years ago. Even more concerning is the declining labor partici-pation rate, which has been slipping since late 2010 and averaged 65 percent in Q3 2013, the lowest in more than six years. Dull economic conditions have limited employment opportunities and discouraged job seekers. Meanwhile, households are bur-dened with high levels of debt (approximately 148 percent of disposable income), which are also likely curtailing spending.

To spur economic activity, the RBA has brought the benchmark interest rate to a his-toric low of 2.5 percent by cutting rates twice in 2013, by a total of 50 basis points. However,

Dull economic conditions have limited employment opportunities and discouraged job seekers.

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Graphic: Deloitte University Press | DUPress.com

Source: Australian Bureau of Statistics, December 2013; Deloitte Services LP economic analysis.

Figure 1. Year-over-year change in GDP and components (%)

Sep 2012 Dec 2012 Mar 2013 Jun 2013 Sep 2013

Imports

Exports

Gross fixed capital formation

Government consumption

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January 2014 | 3

overall growth and spending remain tepid. Even the Australian dollar remains “uncom-fortably high” by the RBA’s own admission,1 hampering exports (figure 3).

At the same time, further monetary easing is not expected in the next few months, amid concerns over rapidly rising house prices (fig-ure 4). The house price index across Australia’s

eight capital cities for Q3 2013 has grown 7.6 percent compared with Q3 2012, and jumped 21.6 percent over the past five years. Limited supply and investor demand have pushed up house prices despite the weak economy, giving rise to fears of a housing bubble. In response, the RBA held rates steady at its latest meeting in December 2013.

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Figure 2. Labor market conditions

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Figure 3. Benchmark interest rate and currency exchange rate

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Economic diversification on the agenda

As global demand cools, it is driving down commodity prices and adversely affecting growth in Australia. Growth halved to 2.3 per-cent year over year in Q3 2013 compared with Q1 2012, as commodity prices slid 5.5 percent over the same period (figure 5).

This is driving the country to reconsider its dependence on mineral exports and related investments, and plan for diversifying its eco-nomic activities. Currently mining accounts for 10 percent of the GDP, up from 7 percent in 1980, but over the same period manufactur-ing has halved to 7 percent from 14 percent, and agriculture has stagnated below 3 percent (figure 6).

Manufacturing and agriculture are both areas of focus for the new government, which during elections had pledged to turn the north of Australia into a major exporter of food products—a “food bowl” for Asia. The govern-ment plans to give Australian agriculture a leg up, including increasing research funding and speeding up free-trade agreement negotiations with Asian countries such as China, India, and Indonesia. To boost manufacturing, the gov-ernment promises to do away with red tape, lower the tax burden, offer an accommodative regulatory environment, and provide mon-etary support. In keeping with its promises, in November 2013 the government introduced a bill to repeal a controversial law related to carbon emission taxes.

However, these are early days for the new government, and its success in reviving and diversifying the economy remains to be seen.

Figure 4. House price index

Price index of established houses (weighted average of 8 capital cities)



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January 2014 | 5

Endnote

1. Reserve Bank of Australia, “Statement by Glenn Stevens, governor: Monetary policy decision” (media release), December 3, 2013.

Figure 5. Economic growth and commodity prices

YoY GDP growth (%)

Commodity price index (RHS)


Source: Australian Bureau of Statistics, December 2013; International Monetary Fund, December 2013; Deloitte Services LP economic analysis.

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Figure 6. Sectors as a share of GDP (%)

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AFTER much anticipation, China’s lead-ers have provided some details about the nature of the reforms they intend to imple-ment. They haven’t said when or how these reforms will take place, nor is it known to what degree China’s leaders will generate the internal support necessary to undertake the reforms. But what we do know is that the plans are quite ambitious and, if fully undertaken, could lead to a very different Chinese econ-omy. China could become more market driven, more consumer driven, more transparent, and more prone to invest in projects with a positive return rather than those that employ lots of workers. This would be all for the better.

What is important, however, is the impact that these reforms are likely to have on global companies that do business in China. Will the reforms create a more level playing field for foreign operators? Will they benefit companies

that export from China, those that sell into the Chinese market, or both? In which industries will the reforms create opportunities?

First, it is worthwhile to consider the broad sweep of the proposed reforms. Here are some of the major reform elements and their likely impact:

1. Reducing the influence of state-owned enterprises (SOEs) and creating a more level playing field for private enterprise—The government proposes to increase taxa-tion of SOEs, increase transparency of SOE finances, boost professional management of SOEs, and allow private companies to invest in SOE projects. For global companies selling into the Chinese market, this could mean a greater opportunity to compete, particularly in such long-protected areas as heavy industry and a variety of services.

ChinaLeveling the playing field through reforms

By Dr. Ira Kalish

January 2014 | 7

SOEs currently have an advantage in terms of access to credit, pricing power, politi-cal connections, and low tax rates. While the reforms won’t end all such privileges, and the reform agenda says nothing about further privatization of SOEs, it seems likely that the reforms will boost the competi-tiveness of private enterprise—including foreign companies.

2. Allowing the market to determine the prices of many goods and services—The government will retain price controls for monopolies, but will allow free move-ment of prices in areas where there is competition. For global companies with efficient distribution and inventory man-agement, this could mean a significant competitive advantage.

3. Allowing private investors to create com-mercial banks in competition with state-run banks—This will be part of a larger reform of the financial system. Such reform is likely to include liberalization of deposit interest rates, creation of deposit insurance, and liberalization of cross-border capital flows. The goal will be to suppress inef-ficient investment, promote more efficient allocation of capital, provide savers with higher returns, and reduce financial risk. For global financial services companies, there could be greater opportunity to compete within China—especially in the burgeoning free-trade zones. For China in general, these reforms suggest that private enterprise would gain greater access to capital and credit, thereby leading to more efficient investment.

4. Protecting private property rights, including creating a court to adjudicate disputes over intellectual property—This is critical to global companies, many of which generate much of their value from their intellectual capital. While the Chinese government’s goal clearly is to promote Chinese innovation, one side effect of this policy could be to help global companies operating in China. Of course, the devil will be in the details and in the implementation.


5. Promoting more rural-urban migration by providing more public services to migrants—This will be critical to main-taining a steady supply of inexpensive labor. Absent further migration, China faces a shortage of labor in its cities, which is already causing a significant rise in wages. China’s labor shortage is causing global companies that source goods there to search for cheaper production locations. More urbanization would suppress urban wages and boost productivity growth. More services to migrants will be part of a larger effort to address rising income inequal-ity—although it will be costly to provide such services. Reversing the rise in income inequality could create new oppor-tunities for consumer-ori-ented businesses selling into the Chinese market.

If implemented successfully (and this is by no means a given), the reforms could lead to faster economic growth, less financial risk to the economy, and a shift in growth away from investment in fixed assets. For global businesses, the reforms would create a more level playing field in a number of industries.

This would come about by boosting the ability of private enterprise to compete with SOEs, restricting the power and boosting the transparency of SOEs, allowing more market pricing, and undertaking efforts to protect intellectual property rights. Such reforms would be particularly beneficial to companies that attempt to sell into the Chinese market rather than those that focus on exporting

from China. SOEs have a high share of heavy industry and domestic services, both of which could soon succumb to more competition.

The potential economic impact of the reforms depends on how fast and to what degree they are implemented. Many of the reforms will bear fruit only over a relatively long period of time. Successful implementation will require political support that could be difficult to engender. Reform of the financial system, however, might have more

immediate implications for the functioning of financial markets. Given the problems in the Chinese banking system, the faster China improves the efficiency of its financial services industry, the more likely that China will avoid serious economic problems stemming from severe imbalances in the financial sector.

The potential economic impact of the reforms depends on how fast and to what degree they are implemented.

January 2014 | 9

INDONESIA’S economy is going through some anxious moments. On one hand, it is dealing with a high current account deficit with resultant currency weakness; on the other, it is facing slowing investments and subdued exports. Given such a scenario, healthy third-quarter GDP growth was a welcome relief. The economy held up well, with consumer spending and government expenditure driving growth. Encouragingly, the current account deficit also fell during the quarter. Challenges remain for the economy, however, especially over the medium to long term. To tackle them, Indonesia needs to open up key sectors, encourage investments, upgrade infrastruc-ture, and tackle corruption. Thus all eyes will be on the mid-2014 elections, with economy watchers hoping for a stable government with a strong reform agenda.

Growth not bad in the third quarter

GDP growth dipped in Q3 2013, but not by much. The economy grew 5.6 percent year over year, down from 5.8 percent in Q2 (figure 1). Investments were subdued, with fixed capital formation growth sliding to 4.5 percent from 4.7 percent in Q2. This is not likely to change much, at least until the second half of 2014, given expectations of high interest rates, currency vulnerability, and policy uncer-tainty due to the coming elections. Offsetting subdued investments in Q3 was an 8.8 percent rise in government expenditure. This was the fastest expenditure growth in four years and was primarily due to the speeding up of infrastructure projects.

IndonesiaA silver lining on the horizon

By Akrur Barua


Surprisingly, private consumption contin-ued to support the economy in Q3 despite high interest rates and real wages dented by high inflation. Indonesian households take recourse to credit primarily to purchase cars and houses, so there were fears that high interest rates would force down consumer expenditure as well as residential investment. This clearly did not happen in Q3. Private consumption grew 5.5 percent, up from 5.1 percent in Q2, with consumers optimistic about jobs and the economy. Low-income families also benefit-ted from government handouts to counter oil subsidy cuts.

A glimmer of hope for exports and external balances

Indonesia’s external sector has been strug-gling for some time now, with exports contrib-uting only marginally to growth, which has been forcing up the current account deficit. However, there was positive news on this front as well. First, exports grew 5.3 percent year over year in Q3, the fastest rise in six quarters. Export volumes are expected to continue edg-ing up, especially during 2014–15, as global

economic growth recovers. While demand from China will not spike soon, a modest eco-nomic recovery in the United States, India, and Europe will aid Indonesia’s exports.

Second, a recovery of export volume is likely to be followed by a recovery of revenues. Prices of palm oil and coal (figure 2), which together make up a fourth of Indonesia’s exports, have revived marginally since the end of Q3 (13 percent and 7 percent respectively). If this trend continues, it will benefit both growth and external balances. Finally, in a welcome respite for policy makers, the current account deficit fell to 3.8 percent of GDP in Q3 from 4.4 percent in Q2. However, external balances continue to face pressure from the capital account due to sharp withdrawal of funds by global investors fearing US Federal Reserve (Fed) tapering.

Bank Indonesia to continue countering rupiah depreciation

Bank Indonesia (BI) has continued its monetary tightening spree to support the Indonesian rupiah, which has declined around 18 percent against the US dollar this year. BI

Figure 1. Healthy year-over-year GDP growth in Q3 2013 (%)


Source: Oxford Economics database, December 2013; Deloitte Services LP economic analysis.

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January 2014 | 11

has raised its key policy rate by a cumulative 175 basis points (bps) since June (figure 3). Its latest move was in November, when it hiked the rate by 25 bps to 7.5 percent, the highest in four years. Although the rupiah has stabilized at a level BI thinks is more in line with funda-mentals, any policy loosening is not expected until 2015. In fact, BI is expected to raise rates by a further 50–75 bps in 2014 to counter the impact of any Fed tapering. Currently markets have already factored in a large share of the impact of such a move, so an actual event is not likely to force the rupiah down by more than 5–6 percent, especially given expectations of a tough BI response.

Both BI and the government will continue to shape policy to support the rupiah and spruce up external balances. They have already introduced currency hedging tools and carried out dollar-denominated bond auctions. One such auction took place in November, but it was open only to domestic investors. The response, however, was tepid, with only $190 million raised, much less than the intended $450 million. The government would do well

to wait for any Fed announcements before further auctions.

Inflation to ease more quickly from second half of 2014

Price pressures continue to remain high, primarily due to the impact of fuel subsidy cuts earlier this year. Inflation rose marginally in November to 8.4 percent year over year from 8.3 percent in October (figure 4). The impact of fuel subsidy cuts is evident from the rela-tively lower core inflation figure of 4.8 percent in November. Going forward, inflation is likely to go down, starting in the second half of 2014, to about 5.0–5.5 percent by 2015. There are three reasons for this expected downward trend. First, the lagged impact of monetary policy will start weighing on prices by that time. Second, the rupiah is likely to stabilize by the end of 2014 and start appreciating the year after, thereby easing import prices. Third, by the second half of 2014, a high base effect will come into play, and the one-off impact of the rise in fuel prices will ease.


Source: Bloomberg, December 2013; Deloitte Services LP economic analysis.

Figure 2. Palm oil and coal prices* have edged up since September end

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Source: Bank Indonesia, December 2013; Bloomberg, December 2013; Deloitte Services LP economic analysis.

Figure 3. BI sharply raised its policy rate to counter rupiah depreciation

*Figure for December is the average for the first five days.

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Source: Bank Indonesia, December 2013; Bloomberg, December 2013; Deloitte Services LP economic analysis.

Figure 4. Inflation spiked in mid-2013 post sharp cuts in fuel subsidies

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Both BI and the government will continue to shape policy to support the rupiah and spruce up external balances.

January 2014 | 13

Indonesia still a lucrative destination for foreign investors

If a reformist and stable government emerges post elections in mid-2014, it will benefit external balances and investments. For example, profits and investment in the min-ing sector have suffered due to nationalistic policies and the dip in the commodities cycle equally. The fluctuating currency and policy uncertainty due to impending elections have not helped foreign direct investments (FDI) either. Nevertheless, Indonesia remains a lucra-tive investment destination with its expanding economy and large population. This is evident from the Q3 FDI figures. Net FDI inflows grew 16 percent in Q3 relative to Q2 despite currency depreciation and other economic risks (figure 5). To make Indonesia a more attractive investment destination, policy mak-ers should invest more in infrastructure and education. This will enable the country to wean away global firms from manufacturing and

services hubs in China and India, where costs are rising.

Need to focus on infrastructure, education, and corruption

Despite political uncertainty ahead of crucial 2014 elections, GDP growth is likely to remain healthy at 5.5–6.0 percent in 2013 and 2014. Private consumption will stay strong, and commodity exports will benefit from an expected uptick in global growth. This in turn will encourage higher investments in the sector and elsewhere from 2015 onward. However, much also depends on which government takes over in 2014. The new government will have its task cut out in closing the country’s infrastructure gap, expanding education, and tackling corruption. Indonesia will require bold reforms in both political and economic governance. Only then can it attain the above–8 percent growth that will propel it into the league of its more illustrious Southeast Asian neighbors.


Source: Bank Indonesia, December 2013; Bloomberg, December 2013; Indonesia Investment Coordinating Board, December 2013; Deloitte Services LP economic analysis.

Figure 5. Net FDI inflows went up in Q3, while the current account improved

Net FDI inflows ($ billion)

Current account (% of GDP; RHS)

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JAPANESE Prime Minister Shinzo Abe’s administration completed a year this month. The past year saw “Abenomic” policies having a fairly successful impact on Japan’s economic growth, confidence, and inflation. While the first two policies of Abe’s three-pronged plan to revive the world’s third-largest economy have been effective, discussions on the third policy of structural reforms are just being initiated. The first move in this direction involves raising consumption tax in April 2014, but this action is being widely debated because it will prob-ably impact consumer spending (which is yet to pick up momentum) and growth (which is still nascent). The slowdown in growth in Q3 2013 has heated the debate further. The risks of going back on promised reforms are high. However, for faster and more sustain-able growth to counteract the fault lines in the economy, Japan needs structural reforms. This

implies that structural reforms will have to be forceful in order to shift expectations and eventually change the regime, which will be a challenging task for Abe.

The year so far

Abe’s one-year-old administration has sought to re-energize Japan’s economy through what is referred to as the three arrows of growth: The first arrow refers to raising gov-ernment spending to boost economic activ-ity; the second arrow refers to the increase in money supply by the Bank of Japan to increase liquidity and raise inflation; and the third targets structural reforms in the labor market, agriculture, health care, capital allocations, and international relations.

The first two Abenomic arrows have already been implemented and have successfully

JapanEvaluating Abenomics on its first anniversary

By Dr. Rumki Majumdar

January 2014 | 15

boosted economic growth, weakened the Japanese yen, improved corporate earnings, and increased inflation as well as inflation expectations in the first half of 2013. Economic sentiments have improved sharply this year since the global financial crisis (figure 1). Consumer confidence rose to its highest in September since 2008, though it fell again in October, mostly due to concerns about typhoons and the US fiscal impasse. Consumer spending has slowly started gaining momen-tum, which is evident from the strong growth in household demand for credit, especially for housing loans, as indicated by a survey of senior loan officers on lending practices of large banks.1 The Bank of Japan’s Tankan index, which gauges the sentiments of the country’s largest manufacturers, has jumped since Abe’s election and has reached its highest level in the current quarter since the financial crisis.

The impact of expansionary monetary policy on prices are in effect with a lag; con-sumer prices have gone up 1 percent year over year this October, the highest in the last five

years, while core consumer price inflation increased the most—0.3 percent—since 1998. Inflation expectation appears to be rising too, as witnessed in a survey by the Bank of Japan, where the number of respondents who expect prices to rise by more than 2 percent doubled to around 75 percent in just one year.2 High liquidity and easy monetary policy will likely keep the yen weak, which implies that exports are expected to be stronger in the near term.

However, despite monetary easing and fiscal stimulus, some quarters of the economy are not responding enough to Abe’s poli-cies. Consumer spending is yet to pick up at a sustainable pace, while weakness in capi-tal spending growth indicates that, despite improved sentiments and increased profits in the last quarter, corporates are not yet ready to invest (figure 2). This is also evident from the senior loan officers’ survey, which indicates that despite banks’ easing of lending standards to firms, firms’ demand for loans has not gone up much in the last year.3 Consumption spending, which accounts for approximately 60


Source: Bank of Japan, Tankan Index, September 2013; Japan Cabinet Office, November 12, 2013; Deloitte Services LP economic analysis.

Figure 1. Improving confidence in the economy

*Business conditions of large enterprises across all industries—actual results (diffusion index, percentage points, not seasonally adjusted)

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percent of GDP, grew at an annualized rate of 0.4 percent in Q3 2013 relative to the previ-ous quarter, while private business investment, which accounts for 13 percent of GDP, grew by a mere 0.7 percent. Exports too failed to grow, despite expectations that the yen’s depreciation would boost exports with a lag. All these indi-cations suggest that structural problems are hindering growth. After strong growth in the first half of the year, economic activity weak-ened in the third quarter, as GDP rose at an annualized 1.9 percent, down from 3.8 percent in the previous quarter. Most of the gain came from government spending and an accumula-tion of inventories.

The other concern is that wages have failed to keep pace with rising consumer prices, as the economy tries to haul itself out of more than a decade of deflation. If the trend contin-ues, falling real income will threaten growth in real consumer spending. This in turn will impact the sustainability of growth as well as inflation momentum in the economy. While the government is giving incentives to

companies to raise salaries in order to sustain consumption, companies are still cautious about hiring or investing.

Near term optimistic

Economic growth is expected to rebound in Q4 2013 and Q1 2014, with consumers likely to increase spending ahead of a sales tax rise in April 2014. The government has announced a new stimulus package to minimize the impact of the tax hike on consumer spending and thus growth, part of which includes cash handouts to low-income families. Recently Abe’s cabinet approved 18.6 trillion yen ($182 billion) for the stimulus package, though the bulk of the pack-age includes loans from government-backed lenders and spending by local governments that was already scheduled. New bills that include tax incentives to encourage corporate investment and the establishment of strategic economic zones with reduced business regula-tions are expected to boost capital spending and investment. All these measures will likely support growth in the short term.


Source: Oxford Economics, December 2013; Deloitte Services LP economic analysis.

Figure 2. Economy picking up momentum, but growth not sustainable

Abenomics period

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January 2014 | 17

However, it is the long-term outlook that appears uncertain. The concern for Japan, which has been fighting deflation and slow growth for a decade-and-a-half, is not the pace of growth or the recent slowdown. Instead, the focus is going to be on structural reforms, which will likely set a sustained growth path for a longer horizon. Japan needs credible structural reforms, and all eyes are on how the government implements the third arrow.

The complexity of the third arrow

Japan’s structural reforms must encompass deeper integration with global markets; more risk-based allocation of capital; domestic mar-ket reforms; reduction of public debt; deregu-lation and increased competition in sectors such as health, agriculture, and energy; and labor market reforms that emphasize increas-ing productivity and labor supply. However, implementing the third arrow is going to be the trickiest for Abe. The Japanese government has made a few big announcements this year on the economic reforms, but these plans are short on details. The success of the reforms will ultimately depend on the ability of the govern-ment to overcome political and corporate resis-tance to structural changes.

Abe has taken bold steps to jolt the economy, with reasonable success this year. However, whether or not he will be able to take the crucial challenge of implementing struc-tural reforms will determine the persistence of Japan’s economic performance in the years to come.

Endnotes

1. Bank of Japan, “Senior loan officer opinion survey on bank lending practices at large Japanese banks,” October 2013, http://www.boj.or.jp/en/statistics/dl/loan/loos/release/loos1310.pdf.

2. Cabinet Office, Government of Japan, “Consumer Confidence Survey October 2013,” November 12, 2013, http://www.esri.cao.go.jp/en/stat/shouhi/shouhi-e.html.

3. Bank of Japan, “Senior loan officer opinion survey.”

Japan needs credible structural reforms, and all eyes are on how the government implements the third arrow.


Additional resources

Deloitte Research thought leadershipGlobal Economic Outlook, Q4 2013: United States, Eurozone, China, Japan, United Kingdom, India, Brazil, Russia

United States Economic Forecast, December 2013

Issue by the Numbers, November 2013: The solution revolution in education

Please visit www.deloitte.com/research for the latest Deloitte Research thought leadership or contact Deloitte Services LP at: [email protected].

For more information about Deloitte Research, please contact John Shumadine, Director, Deloitte Research, part of Deloitte Services LP, at +1 703.251.1800 or via e-mail at [email protected].

January 2014 | 19

http://www.dupress.com/collection/economic-outlooks/#global-economic-outlook-q4-2013http://www.dupress.com/articles/us-economic-forecast-december-2013http://dupress.com/collection/economic-outlooks/#issues-by-the-numbers-november-2013http://www.dupress.com/collection/economic-outlooks/#global-economic-outlook-q4-2013http://www.dupress.com/collection/economic-outlooks/#issues-by-the-numbers-december-2013http://dupress.com/collection/economic-outlooks/#issues-by-the-numbers-november-2013

Contact information

Dr. Ira Kalish is chief global economist of Deloitte Touche Tohmatsu Limited.

Dr. Rumki Majumdar is a macroeconomist and a manager at Deloitte Research, Deloitte Services LP.

Akrur Barua is an economist and a manager at Deloitte Research, Deloitte Services LP.

Navya Kumar is an economist and an assistant manager at Deloitte Research, Deloitte Services LP.

About the authors

Global Economics TeamAditi RaoDeloitte Research Deloitte Services LPIndia Tel: +1 615 209 3941E-mail: [email protected]

Dr. Ira KalishDeloitte Touche Tohmatsu LimitedUSATel: +1.213.688.4765E-mail: [email protected]

Dr. Rumki MajumdarDeloitte Research Deloitte Services LPIndiaTel: +1 615 209 4090E-mail: [email protected]

Akrur BaruaDeloitte Research Deloitte Services LP IndiaTel: +1 678 299 9766E-mail: [email protected]

Navya KumarDeloitte Research Deloitte Services LPIndiaTel: +1 678 299 7123E-mail: [email protected]

Chinese Services Group Leaders Global Chinese Services Group Lawrence Chia Deloitte Touche Tohmatsu Limited China Tel: +86 10 8520 7758 E-mail: [email protected] US Chinese Services Group

Mark Robinson Deloitte Touche Tohmatsu LimitedCanada Tel: +1 416 601 6065E-mail: [email protected]

Japanese Services Group Leaders Global Japanese Services Group Hitoshi Matsumoto Deloitte Touche Tohmatsu LLC Japan Tel: +09 09 688 8396 E-mail: [email protected] Japanese Services Group

John Jeffrey Deloitte LLP USA Tel: +1 212 436 3061 E-mail: [email protected]

Global Industry LeadersConsumer BusinessAntoine de RiedmattenDeloitte Touche Tohmatsu LimitedFranceTel: +33.1.55.61.21.97E-mail: [email protected]

Energy & ResourcesCarl HughesDeloitte Touche Tohmatsu LimitedUKTel: +44.20.7007.0858E-mail: [email protected]

Financial ServicesChris HarveyDeloitte LLPUK Tel: +44.20.7007.1829E-mail: [email protected]

Life Sciences & Health CarePete MooneyDeloitte Touche Tohmatsu LimitedUSATel: +1.617.437.2933E-mail: [email protected]

ManufacturingTim HanleyDeloitte Touche Tohmatsu LimitedUSATel: +1.414.977.2520E-mail: [email protected]

Public SectorPaul MacmillanDeloitte Touch Tohmatsu LimitedCanadaTel: +1.416.874.4203E-mail: [email protected]

Telecommunications, Media & TechnologyJolyon BarkerDeloitte & Touche LLP UKTel: +44 20 7007 1818E-mail: [email protected]


US Industry Leaders Banking & Securities and Financial Services Robert ContriDeloitte LLP USA Tel: +1 212 436 2043 E-mail: [email protected]

Consumer & Industrial Products Craig Giffi Deloitte LLP USA Tel: +1 216 830 6604 E-mail: [email protected]

Health Plans and Health Sciences & Government John Bigalke Deloitte LLP USA Tel: +1 407 246 8235 E-mail: [email protected]

Power & Utilities and Energy & Resources John McCue Deloitte LLP USA Tel: +216 830 6606 E-mail: [email protected]

Telecommunications, Media & Technology Eric Openshaw Deloitte LLP USA Tel: +1 714 913 1370 E-mail: [email protected]

Asia Pacific Industry Leaders Consumer Business Yoshio Matsushita Deloitte Touche Tohmatsu Japan Tel: +81 3 4218 7502 E-mail: [email protected]

Energy & Resources Adi Karev Deloitte Touche Tohmatsu LLC Hong Kong Tel: +852 2852 6442 E-mail: [email protected]

Financial ServicesKaren Bowman Deloitte & Touche LLP Hong Kong Tel: +852 2852 6786 E-mail: [email protected]

Life Sciences & Health Care Ko Asami Deloitte Touche Tohmatsu Japan Tel: +81 3 4218 7419 E-mail: [email protected]

Manufacturing Kumar Kandaswami Deloitte Touche Tohmatsu India Tel: +91 44 6688 5401 E-mail: [email protected]

Telecommunications, Media & Technology Yoshi Asaeda Deloitte Touche Tohmatsu Japan Tel: +81 3 6213 3488 E-mail: [email protected]

January 2014 | 21

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