Archive:Asia-Europe Meeting (ASEM) - a statistical portrait - economy and finance

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Data from April and May 2016. No planned update.

Highlights

With an increase of 4.5 % per year between 1995 and 2014, the economic growth in ASEAN countries was much stronger than the world average (2.8 %).

Japan's government debt was close to 250 % of its annual GDP in 2015.

Gross domestic product by activity, 2014 (¹)
(% of total value added at basic prices)
Source: Eurostat (nama_10_a10) and the United Nations Statistics Division (National Accounts Main Aggregates Database)

This article is part of a Asia-Europe Meeting (ASEM) — A statistical portrait based on Eurostat’s publication Asia-Europe Meeting (ASEM) — A statistical portrait.

It focuses on economic and finance data about the European Union (EU), Norway and Switzerland in comparison with 21 Asian ASEM partners and covers key indicators concerning gross domestic product (GDP), government finances, prices and foreign direct investment.

The use of the term European ASEM partners in this article refers to the 28 Member States of the EU, Norway and Switzerland. The use of the term Asian ASEM partners in this article refers to the 10 members of the Association of Southeast Asian Nations (ASEAN) and the 11 remaining ASEM partners referred to as Northeast and South Asia (NESA).

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Gross domestic product

Growth in GDP averaged 2.7 % per year between 1995 and 2014 among the ASEM partners, roughly in line with the global average of 2.8 %. It should be noted that this period includes the Asian financial crisis and the global financial and economic crisis, both of which can clearly be seen in Figure 1 (with a downturn in activity in 1998 on one hand, as well as in 2008–09 on the other). GDP growth in ASEAN members averaged 4.5 % per year between 1995 and 2014, which was slightly higher than the 4.0 % average recorded for NESA countries and well above the growth rates recorded for Norway and Switzerland (2.0 % combined) or the EU-28 (1.7 %).

Figure 1: Index of the development of gross domestic product at constant prices, 1995–2014
(1995 = 100, based on USD in 2005 prices )
Source: Source: the United Nations Statistics Division (National Accounts Estimates of Main Aggregates) and the World Bank (DataBank)

China’s GDP overtook that of Japan in 2009 to become the largest Asian economy (by this measure); by 2014, its GDP was more than double that of Japan and accounted for 13.4 % of the global total, between half and three fifths of the size of the EU-28’s GDP.

The annual rate of change for GDP in real terms (therefore, after removing the impact of price changes) is shown in Figure 2 for the period 2004–14. Among the larger ASEAN economies shown in the top half of the figure, Indonesia recorded uninterrupted growth, whereas the others reported a contraction in activity during the global financial and economic crisis. The bottom half of the figure shows the largest NESA economies, with uninterrupted growth recorded in China and India, while the Russian Federation posted one year of contraction during the crisis in 2009. The Japanese and EU-28 economies also contracted during the global financial and economic crisis and in addition Japan reported a small fall in GDP in 2011 and the EU-28 a small fall in 2012.

Figure 2: Real rate of change of gross domestic product, 2004–14
(%)
Source: Eurostat (nama_10_gdp) and the United Nations Statistics Division (National Accounts Main Aggregates Database)

During the period 2004–14, China’s economy averaged annual growth of 10.0 % and India’s averaged 7.2 % growth, while Singapore, Indonesia and Malaysia all had average growth between 4.0 % and 6.0 % per year. Thailand (3.5 %) and the Russian Federation (3.4 %) recorded slightly lower annual average growth rates for GDP, while that of Japan was 0.6 %, which was below the 0.9 % average recorded for the EU-28. Among the Asian ASEM partners not shown in Figure 2, the fastest annual average growth rates for GDP between 2004 and 2014 were recorded for Myanmar (9.9 %) and Mongolia (8.8 %), while the slowest rate was 0.4 % in Brunei Darussalam.

Figure 3 shows an analysis of gross national income (GNI) per capita in terms of purchasing power parities; in other words, the GNI data have been divided by the size of the population and adjusted for price level differences. Among the ASEM partners, the highest GNI per capita in 2014 was USD 80.3 thousand recorded in Singapore, although it should be noted that the data for Brunei Darussalam — which had the second highest value — are from 2012 rather than 2014. Norway, Luxembourg and Switzerland also reported high levels of GNI per capita, all above USD 50 thousand. All of the other European ASEM partners reported GNI per capita above the world average of USD 14.9 thousand as did seven of the remaining Asian ASEM partners. The lowest values of GNI per capita were USD 3.3 thousand per capita in Bangladesh and USD 3.1 thousand per capita in Cambodia: this gave a ratio between the average GNI per capita in Singapore and that in Cambodia of 26:1.

Figure 3: Gross national income per capita, 2004 and 2014 (¹)
(USD based on purchasing power parities)
Source: Eurostat (nama_10_gdp) and the World Bank (DataBank)

An analysis of the broad structure of value added is presented in Figure 4, which shows some key differences between the European and Asian ASEM partners in 2014:

— the relative weight of services was larger, on average, among European ASEM partners (73.5 % of total value added) than in any of the Asian ASEM partners except for Singapore (75.0 %); — agriculture, hunting, forestry and fishing was much smaller, on average, among European ASEM partners (1.6 % of total value added) than in any of the Asian ASEM partners except for Japan (1.2 %) and Singapore (0.0 %); — industry was also smaller, on average, among European ASEM partners (19.5 % of total value added) than any of the Asian ASEM partners except for Pakistan (19.2 %), Australia (19.1 %), Cambodia (18.0 %) and New Zealand (17.3 %).

Between the ASEAN members and NESA there were also some notable differences. ASEAN members often had a higher contribution from agriculture, hunting, forestry and fishing, although this share was also high in Pakistan, and to a lesser extent in India, Bangladesh and Mongolia. Equally, there were several ASEAN members where services contributed less than half of their total value added, which was only the case in Mongolia and China among the NESA countries.

Brunei Darussalam — which is rich in petroleum and natural gas resources — had by far the highest contribution from industry, as these activities provided close to two thirds (64.9 %) of its total value added, far ahead of the next highest industrial share which was 36.6 % in Malaysia. Among the Asian ASEM partners, the share of services in total value added peaked at 75.0 % in Singapore. There were 11 EU Member States that reported a higher share of their economic activity within services than the level recorded in Singapore, most notably the tourism focused economies of Greece, Malta and Cyprus — where shares above 80.0 % were recorded — and the financial services focused economy of Luxembourg, where the highest share among all ASEM partners was recorded, with services accounting for 87.8 % of total value added.

Figure 4:Gross domestic product by activity, 2014 (¹)
(% of total value added at basic prices)
Source: Eurostat (nama_10_a10) and the United Nations Statistics Division (National Accounts Main Aggregates Database)

Gross capital formation

Gross capital formation includes investment in fixed capital and valuables, as well as changes in stocks; relative to GDP it gives a broad indication of the scale of investment in an economy. For the EU-28, gross capital formation was 19.5 % of GDP in 2014 (see Figure 5), a figure that was higher than that recorded for Pakistan, but lower than in all of the other Asian ASEM partners. China had, by some margin, the highest ratio of gross capital formation to GDP in 2014, while Myanmar recorded by far the largest increase in this ratio over the last decade (2004–14).

Figure 5: Gross capital formation, EU-28 and Asian ASEM partners, 2004 and 2014
(% of gross domestic product)
Source: Eurostat (nama_10_gdp) and the United Nations Statistics Division (National Accounts Main Aggregates Database)

The trading nature of Singapore’s economy can be clearly seen from Figure 6, as the value of exports and imports both far exceeded its level of GDP in 2014. In several other ASEAN members and in Mongolia the combined value of exports and imports also exceeded GDP. Brunei Darussalam recorded the largest trade surplus relative to GDP (35.3 %), while Myanmar, Bangladesh and Pakistan reported trade deficits in excess of 5.0 % of GDP.

Figure 6: Exports and imports, EU-28 and Asian ASEM partners, 2014
(% of gross domestic product)
Source: Eurostat (nama_10_gdp) and the United Nations Statistics Division (National Accounts Main Aggregates Database)

Government finances

The global financial and economic crisis of 2008–09 and the subsequent sluggish recovery in much of the EU-28 resulted in a considerable impact on key government finance indicators, notably government borrowing/lending for a particular year (public balance) and the consolidated stock of debt at the end of the year (general government debt).

An excess of government expenditure relative to revenue leads to a deficit and this situation was observed for most ASEM partners in Figure 7 for 2015. In the EU-28, government expenditure was equivalent to 47.4 % of GDP in 2015, while for revenues the equivalent ratio was 45.0 %. New Zealand’s ratio of government revenue to GDP was 35.0 %, 10 percentage points below the EU-28 average but nevertheless the highest such ratio among the Asian ASEM partners. Brunei Darussalam’s ratio for government expenditure to GDP was 40.4 %, some 7 percentage points below the EU-28 average but the highest among the Asian ASEM partners.

Figure 7: Government expenditure and revenue, 2015 (¹)
(% of gross domestic product)
Source: Eurostat (gov_10a_main) and the International Monetary Fund (World Economic Outlook Database)

Norway had the largest government surplus in 2015 among all ASEM partners, equivalent to 5.7 % of GDP. Luxembourg and Singapore were the only other ASEM members with a surplus in excess of 1.0 % of GDP, while Germany, Estonia, New Zealand, Thailand and Cambodia reported smaller surpluses, and Sweden and the Philippines had almost balanced positions. The largest government deficit in 2015 reported by any of the ASEM partners was in Brunei Darussalam where the deficit was equivalent to 9.8 % of GDP. Deficits in excess of 5.0 % of GDP were also reported by Mongolia, Greece, India, Vietnam, Kazakhstan, Pakistan, Japan and Spain.

As can be seen from Figure 8, most ASEM partners, particularly the European ones, had recorded larger government deficits (or occasionally smaller surpluses) in 2010 than they did in 2015, as measures were taken to try to counter the effects of the global financial and economic crisis. Among the European ASEM partners only Finland had a slightly bigger deficit in 2015 than in 2010, while this was the case in several Asian ASEM partners: Vietnam, Indonesia, Bangladesh, Myanmar and the Russian Federation. Furthermore, Brunei Darussalam, Mongolia, Kazakhstan, China and the Republic of Korea moved from a government surplus in 2010 to a government deficit in 2015, while Singapore’s surplus contracted between these years.

Figure 8: General government net lending/borrowing, 2010 and 2015 (¹)
(% of gross domestic product)
Source: Eurostat (gov_10dd_edpt1) and the International Monetary Fund (World Economic Outlook Database)

Figure 9 shows the development of general government gross debt for the EU-28 and a selection of larger Asian ASEM partners. Government debt for the EU-28 was relatively stable between 2005 and 2008, but it increased notably in 2009 and 2010 and then more slowly in the next four years, to reach 86.8 % of GDP in 2014, which was 25.8 percentage points higher than in 2008. In 2015, this ratio fell in the EU-28 for the first time since 2007.

Japan’s government debt-to-GDP ratio was relatively stable between 2005 and 2007 before increasing rapidly through to 2014, when Japan’s gross government debt was almost two and a half times the level of its GDP; in 2015 it stabilised at this level. The pattern of development in the Russian Federation was similar, although the ratio initially halved from 14.9 % in 2005 to 7.5 % in 2008, before more than doubling to 17.7 % in 2015. The government debt-to-GDP ratio in China and the Republic of Korea increased in 2009, stabilised for two or three years, and increased again through to 2015. In India, the development was different to all of the other economies shown in Figure 9, as this ratio fell almost every year between 2005 and 2015.

Figure 9: General government gross debt, 2005–15
(% of gross domestic product)
Source: Eurostat (gov_10dd_edpt1) and the International Monetary Fund (World Economic Outlook Database)

Foreign direct investment

Foreign direct investment (FDI) concerns investment in new foreign plant or similar assets as well as the purchase of existing assets that belong to a foreign enterprise. Unlike portfolio investment, FDI involves gaining control or an effective voice in the management of the direct investment enterprise. The indicators presented in Figures 10–12 are averaged over the period 2013–14 as values can vary greatly from one year to the next. Collectively, the ASEAN members were net recipients of FDI during these two years, as were India, China and the EU-28. By contrast, Japan, the Russian Federation and the Republic of Korea all recorded higher net outflows than net inflows.

Figure 10: Foreign direct investment net inflows and net outflows, average 2013–14 (¹)
(% of gross domestic product)
Source: Eurostat (bop_fdi6_flow) and (nama_10_gdp), the United Nations Conference on Trade and Development (UNCTADstat) and ASEAN statistics (Macroeconomic Indicators)

Figure 11: Net inflows to the EU-28 of foreign direct investment from top 10 ASEM investors, average 2013–14 (¹)
(% share of extra-EU-28 net inflows of foreign direct investment)
Source: Eurostat (bop_fdi6_flow)

The main source of net inward FDI to the EU-28 from other ASEM partners in 2013 and 2014 was Switzerland, which contributed 7.6 % of the EU-28’s inward FDI, the third highest share behind the United States (55.9 %) and Bermuda (13.1 %). Collectively, ASEM partners contributed 18.0 % of all FDI flowing into the EU-28 while they accounted for 18.1 % of the net outward FDI from the EU-28 during the same period. China and Singapore’s shares were the largest (4.1 % and 3.9 % respectively) and were the seventh and eighth largest destinations for EU-28 outward investment after several countries in the Americas (the United States, Brazil, Canada and Mexico) as well as Bermuda and Gibraltar.

Figure 12: Net outflows from the EU-28 of foreign direct investment to top 10 ASEM destinations, average 2013–14 (¹)
(% share of extra-EU-28 net outflows of foreign direct investment)
Source: Eurostat (bop_fdi6_flow)

Prices

The world inflation rate (based on the GDP deflator) climbed from 5.4 % in 2005 to 7.9 % in 2008 at the onset of the global financial and economic crisis, before falling to 2.0 % in 2014. The inflation rate for the EU — based on the harmonised index of consumer prices — followed a similar development, although price movements were much more subdued: in 2005 inflation was 2.2 %, rising to 3.7 % in 2008, dropping to 1.0 % in 2009, increasing to 3.1 % by 2011 and then declining to 0.0 % in 2015.

In 2015, consumer price changes among the European ASEM partners ranged from an increase of 0.8 % in Austria to a decrease (deflation) of 0.8 % in Slovenia and Switzerland, with Malta (1.2 %) and Norway (2.0 %) above this range and Bulgaria, Greece (both decreases of 1.1 %) and Cyprus (a decrease of 1.5 %) below this range. Among the Asian ASEM countries, only Thailand, Singapore and Brunei Darussalam reported deflation (all less than 1.0 %) in 2015, while inflation rates exceeded 5.0 % in seven partners, among which Myanmar (11.5 %) and the Russian Federation (15.5 %) reported the fastest increases.

All European ASEM members, except for Norway, reported lower inflation rates in 2015 than they had in 2005, with particularly strong falls reported for Romania, Bulgaria and Latvia. Among the Asian ASEM countries, the Russian Federation, Japan, India and Myanmar had higher inflation rates in 2015 than 10 years earlier, while the biggest falls in inflation were observed in Vietnam, Mongolia, Thailand, the Philippines and Cambodia.

Figure 13: Inflation rate — annual change, 2005 and 2015
(%)
Source: Eurostat (prc_hicp_aind) and the World Bank (DataBank)

Source data for tables and graphs

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Data sources

The indicators presented are often compiled according to international — sometimes global — standards. Although most data are based on international concepts and definitions there may be certain discrepancies in the methods used to compile the data.

Almost all of the indicators presented for the EU (and its Member States), Norway and Switzerland have been drawn from Eurobase, Eurostat’s online database. In exceptional cases some indicators for the EU have been extracted from international sources.

For the Asian ASEM partners and their aggregates (ASEAN and NESA), the data presented have been extracted from a range of international sources, namely the World Bank, the United Nations Statistics Division, the United Nations Conference on Trade and Development (UNCTAD), the International Monetary Fund (IMF) and ASEAN statistics.

For many of the indicators, multiple international statistical sources are available, each with their own policies and practices concerning data management (for example, concerning data validation, the correction of errors, the estimation of missing data, and the frequency of updating). In general, attempts have been made to use only one source for each indicator in order to provide a comparable analysis between the partners.

Aggregates for ASEM, the European ASEM partners and the Asian ASEM partners have been compiled from the data for individual partners as indicated above. As such, they may combine data from Eurostat and international sources.

Context

GDP is the most commonly used economic indicator and provides a measure of the size of an economy, corresponding to the monetary value of all production activities. GDP includes goods and services, as well as products from general government and non-profit institutions within a country (‘domestic’ production). GNI is the sum of gross primary incomes receivable by residents; this is the same as GDP less income payable to non-residents plus income receivable from non-residents (‘national’ concept).

Economic developments can be measured over time by removing the impact of price developments (inflation) to identify the real change in economic activity. Equally, comparisons between countries can be facilitated when indicators are converted from national currencies into a common currency using purchasing power parities (PPP) which reflect price level differences between countries.