Although growth outlook is mixed across Emerging Asia, the
Asian Business Cycle Indicators (ABCIs), issued Monday, suggest signs of
growth stabilisation for China and a more positive outlook for the Philippines
and Singapore, while still weak growth prospects for India.
The Organisation for Economic Cooperation and Development
(OECD) says prolonged external headwinds have weighed on growth in Southeast
Asia. The slowdown in China have weakened the growth momentum of ASEAN. Indeed,
Thailand entered a technical recession in the second quarter of 2013, while
Indonesia’s grow momentum is slowing. In Malaysia and Viet Nam, while real GDP
improved slightly in the second quarter of 2013, underlying growth momentum was
On the other hand, Singapore’s GDP grew at a faster pace on the back of
improvement in trade-related sectors as well as resilience in domestics-oriented
industries. The Philippines economy was the strongest performer in the region,
largely due to its strong domestic demand.
However, the key imminent downside risk facing Southeast
Asia, China and India is the turmoil in the financial market, triggered by the
prospects of tapering of quantitative easing (QE) policy in the US. Emerging
Asian economies which ran large current account deficits and more susceptible to
macroeconomic risks of capital outflows such as India and Indonesia bore the
brunt of the financial turmoil . In addition, global oil prices will remain
volatile should the tension in the Middle-east persists and this could cloud the
inflationary outlook in the near-term.
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