Asia Power: Economic Weakness And Higher Fuel Costs Prompt Downgrade


BMI View : We have moderated our short-term outlook for the Asian power sector this quarter on the back of continuing economic and currency weakness in India as well as idiosyncratic risks in Taiwan. The structural weaknesses in both countries are also likely to extend beyond 2014 and act as a drag on electricity consumption over the medium- to long-term. That said, we note that the regional fundamentals for the Asian power sector remain extremely strong.

We have moderated our short-term outlook for the Asian power sector this quarter, and are now forecasting electricity generation in the region to grow by 6.1% in 2014 (down from 6.2% previously). This moderation was prompted by continuing economic and currency weakness in several countries, most notably India and Taiwan. This is because a slowdown in economic growth or industrial output would negatively impact electricity consumption and generation.

India: Higher Fuel Costs Prompt Downgrade

Weaker INR To Affect Fuel Imports
India - Exchange Rate, INR/US$

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This article is tagged to:
Sector: Power
Geography: Asia, South Korea

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