Highlights
- China's strong demand growth will help pull up regional consumption in Q2
- South Korean imports have increased, but will fall again
- Chinese and Indian imports have jumped
- Asian LNG contract prices are down, but increases are on the way
Economic overview
Contraction and weak growth are forecast for the region’s largest economies.
China’s economic expansion is expected to slow over the next two years. The country’s GDP growth is expected to fall to 6% by 2018 from 6.9% in 2015. Weakening demand for exports was one of the factors that hit growth last year, and will continue to limit the upside for growth this year. Despite this, China’s gas market is expected to expand in 2016. Chinese demand for gas increased by 10% year on year in March.
Asia Pacific GDP forecast
| 2015 | 2016 | 2017 | 2018 | |
| Australia | 2.5% | 2.5% | 3.0% | 3.0% |
| China | 6.9% | 6.5% | 6.2% | 6.0% |
| India | 7.3% | 7.5% | 7.5% | 7.6% |
| Indonesia | 4.8% | 4.9% | 5.3% | 5.5% |
| Japan | 0.5% | 0.5% | -0.1% | 0.4% |
| South Korea | 2.6% | 2.7% | 2.9% | 3.1% |
| Malaysia | 5.0% | 4.4% | 4.8% | 4.8% |
The outlook for Japan’s economy is the weakest of the region’s major players. Its GDP is forecast to grow by 0.5% this year, but it is expected to contract in 2017. The strengthening yen and weaker demand for exports make for a bleak economic outlook and will limit the potential for any growth in gas consumption. Japan’s demand for electricity has been falling on an annual basis in recent months, and it is likely to continue to fall over the summer. This will limit the upside for gas demand, despite delays in restarting the country’s nuclear plants.