Macq-ro insights:Factory Asia’s 2018-20out

Over 2018-20, we forecast real GDP growth for Factory Asia at 3.7% pa,with 0.9ppt pa attributable to exports. The latter is consistent with FactoryAsia export growth of 4% pa. We expect global export growth to average 3% pa.Factory Asia includes Japan.

In comparison, export growth contributed 1.6ppt of the region’s 4.0% pa realGDP growth over 2011-15, when Factory Asia’s export growth averaged 8% pa.

Our 2018-20base case has an ongoing gentle fade in East Asia’s growthwith the region’s deteriorating demographics, below, being one important factor.Growth in the labour force has decelerated to zero. The region’s homepurchasingdemographic of 20-49year olds is now shrinking at around 1% pa.