asia pacific economic outlook · of short-term money aimed at arbitraging china’s high interest...

Asia Pacific Economic OutlookApril 2014

ChinaIndiaMalaysiaVietnam

CHINA’S currency recently did something that it hasn’t done in a long time: In late

February it began a sustained reversal of a pattern of appreciation against the US dol-lar that reaches back to 2005. This action was widely attributed to the People’s Bank of China (PBOC), which denies having anything to do with it.1 Opinions differ on whether the PBOC is proactive or reactive in this critical shift. There has been considerable upward pressure on the currency as investors sought to bring money into the country to take advantage of high returns and speculate on future currency appreciation. This fact vexed the central bank, and it was forced to acquire foreign currency reserves in order to stem the currency rise. Although there have been substantial inflows of short-term money aimed at arbitraging China’s high interest rates, long-term money has been flowing out at an increasing pace. High-net-worth individuals in China and

corporates with free cash are said to be con-cerned about domestic overinvestment, exces-sive money supply growth, and troubles in the financial system. There is also concern that the actual inflation rate far exceeds the govern-ment’s published numbers.

Meanwhile, the PBOC has announced plans to widen the band around which the currency is permitted to move. Following the announcement, the renminbi fell almost 1.0 percent, one of the sharpest declines ever. It is possible, though uncertain, that the band will be further widened as the bank makes plans to allow freer trading of renminbi and freer cross-border capital flows. The ultimate goal, of course, is to make the renminbi a widely used trading and reserve currency. Yet for this to happen on a large scale, capital controls will need to end, and there will need to be a more transparent monetary policy. There continues to be talk about further liberalization, and the

ChinaCurrency volatility and financial woes

By Dr. Ira Kalish

2 | Asia Pacific Economic Outlook

government has been resolute in not announc-ing any specific dates for key reform moves to be implemented. A major external force cur-rently acting on the renminbi is the tapering of the US Federal Reserve’s liquidity operations and the resulting impact on returns outside of China.

Financial system woes

It has been reported that financial risk spreads in China are rising to levels not seen in many years. This suggests that there is a flight to quality as investors become increasingly worried about risks to the financial system. Indeed yields on Chinese government bonds have declined, which also reflects the central bank’s efforts to slow credit growth, especially in the shadow banking system. The volume of assets in off-bal-ance-sheet vehicles has increased dramatically in the last year, and the volume reaching maturity this year will be far greater than last year. Credit continued to grow throughout 2013 at nearly twice the rate of GDP growth. Meanwhile, the fear of default is increasing, especially as China only recently averted default on a trust product when a large bank agreed to cover the losses. The expecta-tion is that the government will not cushion another imminent default.

The issue of default will be a major theme in 2014, given the large number of products reaching maturity, which is one reason for the increase in spreads. Indeed, credit default swap prices on banks have risen rapidly lately. Does all of this mean that China faces a crisis? Yes and no: Yes, there could be serious problems in the financial system. No, it is not likely to involve the failure of a large financial institu-tion. A more likely scenario would be a gov-ernment bailout of large financial institutions

followed by a cutback in lending, leading to a slowdown in growth.

However, this is inconsistent with Prime Minister Li Keqiang’s plans. He recently announced a growth target of 7.5 percent, pledging that the government would continue investment to achieve it.2 This is both good and bad news: China’s credit intensity is now approaching five, which means five units of investment are required to drive one unit of GDP growth. The growing inefficiency of driving growth through investment could be problematic. Meanwhile, the headline growth number that China announces annually has itself been a major impediment to reform. China may have to engineer a slowdown in growth in order to resolve the imbalances

in the financial system. To offset a slowdown in debt-fueled investment, it would make sense to imple-ment measures designed to boost consumer spending.

What about debt?

Concerns about the level of debt in China continue. It was reported that nonfinancial companies in China have debt equivalent to 120 percent of GDP—a figure much higher than in most other major economies. The volume of such debt has increased 260 percent since 2008. The large amount of debt, along with a slowing economy and plenty of excess capacity in industry, raises questions about whether companies will be able to continue servicing this debt. China’s government does not generally let companies fail, especially state-owned companies, but will it be willing to absorb considerable losses in the future? If it does, what will it expect of companies in exchange? Perhaps it will demand restructur-ing in order to eliminate excess capacity; to some extent this is already under way. Perhaps

Does all of this mean that China faces a crisis? Yes and no.

April 2014 | 3

Endnotes

1. Bloomberg, “PBOC seen doubling yuan band next quarter amid global push,” February 28, 2014, http://www.bloomberg.com/news/2014-02-27/pboc-seen-doubling-yuan-band-next-quarter-amid-global-push.html.

2. Reuters, “China aims for 7.5 percent economic growth in 2014: Premier Li,” March 4, 2014, http://www.reuters.com/article/2014/03/05/us-china-parliament-gdp-idUSBREA2400X20140305.

it will impose restrictions on further borrow-ing. Clearly something has to give. The process of substantial restructuring of Chinese indus-try has been discussed for decades, but now is certainly a time when it is badly needed.

Local governments in China are crushed with debt, a situation that is worrisome for Beijing. As such, one of the options the gov-ernment is considering is a reform that would make China Development Bank (CDB) the sole lender to local governments. The CDB is a government-owned policy lender that is already actively financing infrastructure development in China. The rumored reform

plan would have the CDB evaluate loans and be the sole arbiter of whether local govern-ments obtain credit. As such, it would allow Beijing to take control of the local government debt situation, which is now conservatively estimated at nearly 18 trillion Chinese yuan. While this reform would be a step in the right direction, it does not address the issue of what to do about existing debts that are likely to go bad. To address this, Beijing will probably need to provide some sort of bailout. Interestingly, there is a widespread belief that the accumu-lated debt is guaranteed by either the central or local governments—yet this is not the case.


INDIA has been facing multiple fundamental domestic challenges, and, with every pass-

ing quarter, the focus of issues concerning the economy shifts. Some challenges are more per-sistent and recur frequently, such as inflation. High inflation has constantly afflicted India for more than half a decade, and, barring a few months, consumer price inflation remained in double digits for the whole of calendar year 2013. At the same time, a few challenges have been sporadic, and some of them completely new, but these have still severely impacted the economy’s health and outlook. Last year, India’s currency experienced a strong depreciation due to a high current account deficit (the level recorded in fiscal year [FY] 2012–13 was the highest ever) and high capital outflows (post the US Federal Reserve’s hint of tapering its monetary policy easing). Political uncertainty and policy challenges aggravated the situation, raising doubts about the economy’s ability to

sustain growth. Global economic uncertainty and geopolitical tensions in different parts of the world added to the economic woes. These recurring and periodic challenges weighed upon economic growth, as reflected in the release of the Q3 data of FY 2013–14 GDP and revisions of the GDP numbers for earlier years.

Slower growth

As per the recent release, annual real GDP growth estimates for FY 2012–13 were revised down by five percentage points, to 4.5 percent, due to lower-than-expected growth in primary and secondary sectors (figure 1). Growth in the secondary sector (which constitutes manufac-turing, electricity, gas and water supply, and construction) was reduced to half its earlier estimate due to the poor performance in all its subsectors.

The growth estimates for the first two quar-ters of FY 2013–14 have not been revised yet.

IndiaSlower but still steady

By Dr. Rumki Majumdar

April 2014 | 5

However, the third-quarter growth estimates are based on the first revised estimates of 2013–14. The revision indicates poor growth of 4.7 percent year over year. In other words, the downward revision of earlier growth estimates and weaker growth in the latest quarter indicate that the economy is on the path of a sustained slowdown.

Growth in the services industries improved in Q3 of FY 2013–14, but growth in the agriculture, manufacturing, and construction sectors slowed significantly, weighing down overall economic growth. The fall in growth in the manufacturing and the construction sectors was probably a combined effect of low business confidence, poor investment growth, slowing domestic demand, and tightening of monetary policies by the Reserve Bank of India (RBI).

Tighter credit conditions

The RBI raised its key policy rate by 25 basis points to 8 percent for the third time in five months in order to check rising prices and anchor inflation expectation. This raise is in line with the recommendations of an expert

committee, set up by the RBI governor, to adopt consumer price inflation as the nominal anchor for monetary policy framework, with a target of 4 percent with a range of 2 percent around it in the long term. After credit condi-tions were tightened, the inflation rate has come down in the last two months. The con-sumer price index fell to 7.2 percent year over year in January 2014, to its lowest level in the last two years. Food price inflation, which has contributed the most to overall prices, has also been contracting.

That said, the rise in wages (especially in services) and in prices of intermediaries, as well as structural bottlenecks, has been contributing substantially to the rising prices, and tight credit conditions help to check a price rise. If the desired rate of inflation is 8 percent by January 2015 and 6 percent by the beginning of 2016, as advocated by the expert

The volatility in currency and capital flows has stabilized in recent months.

Graphic: Deloitte University Press | DUPress.com

Figure 1. Growth revised for earlier years Real GDP growth rate at factor cost

Source: Reserve Bank of India, “Macroeconomic aggregates,” February 2014; Press Information Bureau, “Statement 1. National income, consumption expenditure, saving and capital formation,” January 2014; Deloitte Services LP economic analysis.

USD

, mill

ion

n Revised n Unrevised

02009–10 2010–11 2011–12 2012–13

1

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4

5

10


committee, it is expected that credit condi-tions will likely remain tight in the near future as well.

Outlook for the current quarter

While the underlying economic growth trends are weak, the downside risks to the economy have reduced substantially compared with 2013. India’s trade balance has improved owing to the rise in exports. Inflation is likely to remain contained as the impact of the inter-est rate hike starts kicking in and domestic demand falls. Commodity prices are also fall-ing due to poor growth and financial uncer-tainty in China as well as geopolitical tensions in the Middle East and eastern European countries. India is a net importer of oil and oil products; any fall in global prices of oil will be reflected in the movement in domestic prices.

The volatility in currency and capital flows has stabilized in recent months. Investors’ per-ceived risks about the implications of US mon-etary policy tapering have been diminishing. The RBI’s monetary policies have managed to control rupee depreciation. The stock market is currently stable, though it is operating within a very narrow range.

The fiscal consolidation to meet the deficit target has helped contain the fiscal deficit to 3.8 percent of the GDP in Q3 of FY 2013–14. Despite the consolidation, the deficit may miss the target this fiscal year due to lower tax col-lections and high government expenditure in the first half of FY 2013–14. If, however, the government is determined to limit its fiscal deficit, lower government spending will likely shave a few percentage points off growth.

Longer-term outlook

The growth outlook for the economy will primarily hinge on the election outcomes. A better government with a clear mandate will likely boost business and investor confidence. However, it is difficult to predict the election results in advance, and the rising significance of regional parties will likely complicate the situation.

Once there is more political and policy cer-tainty, growth will likely improve in the second half of FY 2014–15, but its pace will be moder-ate. Downward risks will remain high if global uncertainties increase. Coordinated, defined monetary and fiscal policies will likely mitigate risks as the economy continues on its path.

April 2014 | 7

MALAYSIA’S economy ended 2013 on a positive note, with GDP growth

accelerating in the fourth quarter. An exports recovery is underway, which is expected to consolidate as economic growth in the United States and Europe picks up in 2014–15. Rising exports have also aided external balances; this and improving public finances will please investors and rating agencies. Policymakers, however, face two key concerns: high house-hold debt and a potential housing bubble. Although the government and Bank Negara (BN) have taken steps to tackle these issues, doing so without destabilizing the banking sec-tor and the wider economy will be a challenge.

Growth picked up in Q4 2013

The economy grew 5.1 percent year over year in Q4 2013, maintaining its positive

momentum from Q3 when GDP growth was 5.0 percent. This momentum pushed up annual growth in 2013 to 4.7 percent, a figure that appeared unlikely in the first half of the year when growth averaged 4.2 percent. Growth in Q4 was driven primarily by strong private sector activity and rising exports. Real exports grew 2.9 percent, up from 1.7 percent in Q3, while growth in private sector investments rose to 16.5 percent from 15.2 percent during this period. The drag on growth in Q4 came from slowing government spending due to a fiscal consolidation drive. Public consumption growth slowed, while public investment fell 2.7 percent in the quarter. Consumer spend-ing growth also eased, albeit moderately to 7.3 percent. In the short term, the sector faces headwinds from high household debt, rising inflation, and lower nominal wage growth.

MalaysiaEncouraging signs amid challenges

By Akrur Barua


Exports and manufacturing on their way up

Arguably, the best news for the economy is reviving exports. In December 2013, exports rose for the sixth consecutive month, with strong contributions from electronics and petroleum. Prospects for palm oil, another key

export item, are improving as well. Palm oil prices, which had sunk to a three-year low in July 2013, have gone up 28 percent since then. With economic growth set to pick up in the West, exports (in real terms) from Malaysia are expected to grow 3.5–4.0 percent this year, up from less than 1 percent in 2013. Reviving exports have also aided industries, especially manufacturing. For example, manufactur-ing grew 6.7 percent in December 2013—a 13-month high—which in turn pushed industrial output up by 4.8 percent (despite a dip in crude oil extraction). Manufacturing is expected to strengthen further over 2014–15, thereby enabling industrial growth of 5.5–6.0 percent in this period.

Worries ahead for consumersAs exports dipped during the global

downturn of 2008–09, Malaysia’s policymakers started focusing on alternative growth avenues. Household consumption was one such area, and policymakers sought to boost it through a host of measures, including low interest rates. Consequently, consumer credit shot up post 2008, which in turn pushed up consumer indebtedness. For example, household debt is

currently about 86 percent of GDP, up from 50 percent in 2008. Predictably, this deteriora-tion in household finances poses risks, both for consumers and banks. Consumers also face lower wage gains this year as businesses respond to rising costs (courtesy minimum wages and subsidy cuts). Probably the only positive for consumers this year is the govern-ment’s decision to defer a consumption tax of 6 percent to 2015. However, this deferment will not be enough to push personal consumption growth above 6.5 percent in 2014.

Policymakers step in to counter housing boom

Malaysia’s housing sector has been on a roll since 2008, aided by cheap credit and relaxed foreign ownership rules. Since 2009, house prices have soared 47 percent, way above the 29 percent rise during 2000–08, a longer time period. However, as consumer finances deteriorate and supply increases, the boom risks turning into a bubble. Worried by this, both BN and the government have stepped in. While the latter has hiked property sales taxes and foreign investment limits, BN has tried to curb mortgages. These measures appear to be having an impact. In December 2013, housing loan applications fell 27 percent, while in Q4 2013 growth in house prices appears to have eased. Policymakers will, however, be wary of taking action too fast as that would affect both households and banks. There are also concerns that the current measures will hit the middle class disproportionately, especially first-time home buyers.

BN not likely to raise rates by more than 25 basis points

In January 2014, inflation touched a 27-month high of 3.4 percent. Price pressures have been edging up, primarily due to sub-sidy cuts and hence hikes in regulated prices of commodities such as sugar (14 percent),

Household debt is currently about 86 percent of GDP, up from 50 percent in 2008.

April 2014 | 9

fuel (11 percent), and electricity (15 percent). The Malaysian ringgit’s decline against the US dollar—7 percent in 2013 and another 1 per-cent this year—in response to the US Federal Reserve’s tapering of quantitative easing has also aided inflation. Ideally, BN would have liked to counter rising inflation and a weaken-ing currency through a rate hike. However, this would raise debt-servicing costs for households already burdened with high debt. This in turn could push up loan defaults, thereby denting banking sector health and the wider economy. So BN will likely wait until the second half of the year before tightening monetary policy, and any rate hike will not likely be higher than 25 basis points.

Challenges in fiscal consolidation

In July 2013, Fitch put Malaysia on nega-tive outlook, in response to a declining trade surplus, a persistent fiscal deficit, and slowing-growth.1 Luckily, things have improved since then: Growth has gone up, the trade surplus has increased, and fiscal consolidation is underway. Fitch has appreciated this improve-ment, even as another rating major, Moody’s, went a step ahead and raised its outlook to

positive in November 2013.2 However, the government is not out of the woods yet. First, rising discontent could force the government to delay tough measures. The generalized sales tax has already been postponed by a year to 2015. Second, the government is yet to tackle its large bill of public sector salaries. Finally, fiscal tightening amid popular resentment could result in undesirable cuts in segments such as public investment. The government has to find a way to sustain critical projects. A good example here is the $444 billion public-private investment program aimed at con-verting Malaysia into a developed economy by 2020.

Growth expected to remain healthy in 2014–15

Despite the above challenges, Malaysia’s economy looks on course to post 5.0–5.5 percent growth during 2014–15. This year, the economy will also benefit from the Visit Malaysia Year 2014 campaign, which is expected to boost tourism. In the medium to long term, favorable demographics, increasing competitiveness, and growing trade and invest-ment links will keep the economy strong.

Endnotes

1. Reuters, “Fitch revises Malaysia’s outlook to negative; affirms IDRs at ‘A-’ /‘A,’” July 30, 2013, http://www.reuters.com/article/2013/07/30/fitch-revises-malaysias-outlook-to-negat-idUSFit66566620130730.

2. Moody’s Investors Service, “Moody’s changes outlook for Malaysia’s A3 rat-ing to positive from stable,” November 20, 2013, https://www.moodys.com/research/Moodys-changes-outlook-for-Malaysias-A3-rating-to-positive-from--PR_286966.


THE year 2013 turned out to be positive for the economy. GDP registered a growth

of 5.4 percent year over year. Although the growth was lower than the government’s target growth of 5.5 percent, it was an improvement over the 5.3 percent growth of 2012. GDP grew at a sustained pace in all four quarters of 2013, indicating signs of stability following a bout of economic volatility during 2011–12. The growth was fueled by a strong rise in final con-sumption, which grew 5.4 percent year over year and contributed 3.7 percentage points to the overall growth.

Last year marked a significant improvement in the trade balance as well as the consumer price index; the latter’s improvement is con-sidered to be the biggest achievement of 2013 by investors. Improved global demand and successful trade negotiations helped export-oriented firms attain robust growth. The trade

account, which recorded a surplus in 2012 (last seen in 2001), improved further due to a rise in the export of mobile phones and other con-sumer electronics (figure 1). For the first time in more than a decade, net exports contributed positively to growth, by one percentage point in 2013.

Last year, the economy achieved a great deal in containing rising prices to a decade low. Average consumer prices fell to 6.6 percent in 2013, from 9.1 percent in 2012 and 18.7 per-cent in 2011 (figure 2). The price indices of the food and education sectors, which had expe-rienced high volatility and contributed signifi-cantly to the overall price rise during 2011–12, came down and remained stable for all of 2013. However, the government’s adjustment of the health fee in early 2013 led to prices rising in medicine and health care services last year.

VietnamTurning the corner

By Dr. Rumki Majumdar

April 2014 | 11

Successful policies

Proactive fiscal and monetary policies have played an important role in improving the economic outlook over the past two years. The government has undertaken several programs for economic restructuring, which involve privatizing state-owned enterprises, relaxing regulations to encourage private businesses, and encouraging foreign participation. In response to the government’s plan to restruc-ture the financial sector that began in 2012, credit institutions have witnessed high level of consolidations through mergers and acquisi-tions. In addition, the government completed the equitization of the four state-owned com-mercial banks. All these government initiatives have improved the investment climate and business sentiments—as evidenced by foreign direct investment reaching an estimated $11.5 billion, an increase of 10 percent year over year. This year the government plans to com-prehensively restructure financial institutions and improve business conditions to ease capital access by investors and businesses, which includes diverting credit from state-owned enterprises to private firms and divesting non-core assets of these enterprises.

The monetary policies have successfully contained inflation, lowering it from two digits to a single digit over two years. In addition,

the policies have helped to stabilize domestic currency as well as improve foreign currency reserves by shoring up demand for local cur-rency through unconventional policy mea-sures. The Vietnamese currency is expected to remain stable this year as inflation stabilizes and the demand for exports improves.

Monetary policy in Vietnam is oriented toward growth. Last year, interest rates were cut twice, in March and May, to boost credit growth despite high inflation. Consequently, the average lending rates dropped substan-tially in 2013, boosting consumption demand. Additionally, lower rates allowed domestic businesses to strengthen their production and trading and to maintain their inventories. The State Bank of Vietnam (SBV) has not reduced rates in recent months, but if inflation con-tinues to remain low, monetary policy may ease further to improve credit growth and bank lending.

Policy consequences

That said, the government’s pro-growth policies have fast deteriorated the fiscal deficit, which has widened from 2.3 percent of GDP in 2011 to over 5 percent over 2012–13. The policy stance is unlikely to change in the near future as the government appears willing to step up expenditures to boost growth and


Figure 1. Improved trade balance

Source: Economic Intelligence Unit, Country report: Vietnam, February 2014; Deloitte Services LP economic analysis.

-4,000Q1 2011 Q3 2011 Q1 2012 Q3 2012 Q1 2013 Q3 2013

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-1,000

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ensure macroeconomic stability. This may deteriorate the fiscal balance further.

Although monetary policies have improved lending in recent years, the banking sector has witnessed a rise in the nonperforming loan (NPL) ratio. In a recent report on the pros-pects of the banking sector in 2014, Moody’s announced the ratio of “problematic” assets to be at least 15 percent of total outstanding loans, instead of the 4.7 percent announced by the SBV in October 2013.1 Shortly there-after, the SBV challenged Moody’s report in a press release, reaffirming that the NPL ratio has come down in December 2013 to 3.6 percent of the total outstanding loan (due to a purchase of NPLs worth $1.9 billion at the end of 2013). It emphasized that information released by state authorities is more reliable.2 Nevertheless, a rapid rise in the value of bad debts in recent years is a pressing policy chal-lenge for the banking sector. The government has taken measures to manage debt by creating the Vietnamese Asset Management Company to buy up and rehabilitate doubtful loans.

However, the lack of transparency continues to obscure the correct estimate of the bad-debt ratio.

Advantages can drive growth

The economy continues to face substantial risks to growth and inflation due to structural bottlenecks, rising fiscal imbalance, and cur-rent inertia within the ruling party. However, Vietnam remains an attractive investment des-tination for global manufacturers and inves-tors because of its low-cost labor pool as well as its large and growing domestic market. The economy will likely continue to benefit from the relocation of low-cost export manufactur-ing from China. Growth in foreign invest-ment, which has rapidly increased in recent years, is expected to accelerate, especially in the electronics sector. Furthermore, much of the foreign investment is likely to be focused on the export-oriented manufacturing sector, which in turn will likely help improve the trade balance further.

Endnotes

1. State Bank of Vietnam, “Press release on SBV standpoint on NPL ratio of Vietnam’s banking sector,” February 24, 2014, http://www.sbv.gov.vn/portal/faces/en/enlinks/endetail/encm411/enct411?dDocName=CNTHWEBAP0116211755653&_afrLoop=6781683203766100&_afrWindowMode=0&_afrWindowId=16vcxima2b_1#%40%3F_afrWindowId%3D16vcxima2b_1%26_afrLoop%3D6781683203766100%26dDocName%3DCNTHWEBAP0116211755653%26_afrWindowMode%3D0%26_adf.ctrl-state%3D16vcxima2b_493.

2. Ibid.


Figure 2. Success in curbing consumer price inflation

Source: Source: Oxford Economics database, February 2014; Deloitte Services LP economic analysis.

%, Y

oY

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5.0

10.0

15.0

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25.0

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

April 2014 | 13

Graphic: Deloitte University Press | dupress.comSources: OECD-WTO TiVA dataset, May 3013 release; Bureau of Economic Analysis; Bureau of Labor Statistics

Copyright © 2014 Deloitte Development LLC. All rights reserved.

I M P O R T S

E X P O R T S

CH

INA

USA

Global export shares 2009

10.6%9.4%

CH

INA

USA

12.4%

8.3%

GROSS EXPORTS

DOMESTIC VALUE-ADDED

EXPORTS

Value of US imports and exports 2009

$1.46 T

$1.85 T

$463 B

$1.29 T

25%DOMESTIC

VALUE-ADDED

88%DOMESTIC VALUE-ADDED

TRADE IN VALUE-ADDED (TiVA)TRADE IN VALUE-ADDED (TiVA)GROSS FLOWSGROSS FLOWS vs.

Issues by the NumbersA new view of international tradeMarch 2014

Additional resources

Deloitte Research thought leadershipGlobal Economic Outlook, Q1 2014: United States, Eurozone, China, Japan, United Kingdom, India, Brazil, Russia

United States Economic Forecast, December 2013

Issue by the Numbers, March 2014: A new view of international trade

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].


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.

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]

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

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April 2014 | 15

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

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