World Bank bullish about Southeast Asia

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Projected growth rates for East Asian countries. Click to enlarge (Source: World Bank)

The World Bank is projecting optimistic growth rates for ASEAN-5 countries in its latest report “East Asia and Pacific Economic Data Monitor”. Due to strong domestic demand and noted investment spending, Thailand, Malaysia and Indonesia are booming, the report said. For Indonesia, the ratio of investment to gross domestic product has now returned to pre-Asian financial crisis levels.

The World Bank kept its 2012 GDP forecasts for Indonesia and Thailand at 6.1 per cent and 4.5 per cent, respectively, and raised its 2012 growth outlook for Malaysia to 4.8 per cent from 4.6 per cent. The 2012 forecast for the Philippines was increased to 5.0 per cent from 4.2 per cent.

“The East Asia and Pacific region’s share in the global economy has tripled in the last two decades, from 6 per cent to almost 18 per cent today, which underscores the critical importance of this region’s continued growth for the rest of the world,” said World Bank Group president Jim Yong Kim.

The bank said most developing East Asian economies were well positioned to weather troubles in the global economy as they enjoyed current account surpluses or only modest deficits and held high levels of foreign exchange reserves relative to their international payment obligations.

The report cites reconstruction spending in Thailand after last year’s floods as among the factors buttressing domestic demand in the region. In addition, such countries as Indonesia – together with Thailand and Malaysia – are currently enjoying a boom in spending by their governments and the private sector on capital goods.

Large ASEAN economies saw an average growth rate of 9.4 per cent in the second quarter, a trend that the World Bank  expects to continue. In particular, investment spending in Thailand, Malaysia and Indonesia is booming, and the latter has now reached investment-to-GDP levels equaling those from before the 1997 Asian financial crisis for the first time.

But the World Bank warned that countries such as Mongolia, Laos, East Timor, Fiji and Papua New Guinea – which are part of the East Asia and Pacific survey – could experience a sharp terms-of-trade shock in a major slowdown, as commodities accounted for at least 80 per cent of total exports.

However, excluding China, the average growth rate for Indonesia, Malaysia, the Philippines, Thailand, Vietnam, Cambodia, Fiji, Laos, Mongolia, Myanmar, Papua New Guinea, Solomon Islands and East Timor is predicted to be 5.3 per cent this year and 5.5 per cent in 2013.

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Reading Time: 2 minutes

Projected growth rates for East Asian countries. Click to enlarge (Source: World Bank)

The World Bank is projecting optimistic growth rates for ASEAN-5 countries in its latest report “East Asia and Pacific Economic Data Monitor”. Due to strong domestic demand and noted investment spending, Thailand, Malaysia and Indonesia are booming, the report said. For Indonesia, the ratio of investment to gross domestic product has now returned to pre-Asian financial crisis levels.

Reading Time: 2 minutes

Projected growth rates for East Asian countries. Click to enlarge (Source: World Bank)

The World Bank is projecting optimistic growth rates for ASEAN-5 countries in its latest report “East Asia and Pacific Economic Data Monitor”. Due to strong domestic demand and noted investment spending, Thailand, Malaysia and Indonesia are booming, the report said. For Indonesia, the ratio of investment to gross domestic product has now returned to pre-Asian financial crisis levels.

The World Bank kept its 2012 GDP forecasts for Indonesia and Thailand at 6.1 per cent and 4.5 per cent, respectively, and raised its 2012 growth outlook for Malaysia to 4.8 per cent from 4.6 per cent. The 2012 forecast for the Philippines was increased to 5.0 per cent from 4.2 per cent.

“The East Asia and Pacific region’s share in the global economy has tripled in the last two decades, from 6 per cent to almost 18 per cent today, which underscores the critical importance of this region’s continued growth for the rest of the world,” said World Bank Group president Jim Yong Kim.

The bank said most developing East Asian economies were well positioned to weather troubles in the global economy as they enjoyed current account surpluses or only modest deficits and held high levels of foreign exchange reserves relative to their international payment obligations.

The report cites reconstruction spending in Thailand after last year’s floods as among the factors buttressing domestic demand in the region. In addition, such countries as Indonesia – together with Thailand and Malaysia – are currently enjoying a boom in spending by their governments and the private sector on capital goods.

Large ASEAN economies saw an average growth rate of 9.4 per cent in the second quarter, a trend that the World Bank  expects to continue. In particular, investment spending in Thailand, Malaysia and Indonesia is booming, and the latter has now reached investment-to-GDP levels equaling those from before the 1997 Asian financial crisis for the first time.

But the World Bank warned that countries such as Mongolia, Laos, East Timor, Fiji and Papua New Guinea – which are part of the East Asia and Pacific survey – could experience a sharp terms-of-trade shock in a major slowdown, as commodities accounted for at least 80 per cent of total exports.

However, excluding China, the average growth rate for Indonesia, Malaysia, the Philippines, Thailand, Vietnam, Cambodia, Fiji, Laos, Mongolia, Myanmar, Papua New Guinea, Solomon Islands and East Timor is predicted to be 5.3 per cent this year and 5.5 per cent in 2013.

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