Asia's exports to Europe crashed by a whopping US$99b

And no one is happy about it.

According to DBS, Europe has stopped shrinking and that will bring a big change to Asia’s export fortunes going forward. 

In fact, it already has. Asia’s exports to Europe fell by US$99bn in 2012.

That’s a big chunk of change – equivalent to some 0.75% of GDP. If Asia’s exports to Europe had simply run sideways, GDP growth would have been that much higher – 6.8% instead of 6.1% in 2012.

Here's more from DBS:

When you don’t have a fill a hole first, growth comes that much easier. And Asia’s hole was one-eighth as big as its growth was in 2012.

With a bit of luck exports to Europe could even move north in the months ahead. But that would be icing on the cake. For now, sideways movement is good enough– that alone should add about a half a percentage point to Asia’s GDP growth in 2014.

At the moment, we expect 6.4% GDP growth in the Asia-10 in 2014 compared to 6% in 2013 and 6.1% in 2012. There is upside potential coming from Europe and China but, unfortunately, the US has slowed and Asia’s exports there have turned sideways over the past year.

Plainly this deterioration will negate some of the better news coming from Europe. One up, one down – Asia’s domestic demand will continue to provide the base load demand for mid-6% GDP growth next year.