May 27, 2012

Singapore - Asean export growth likely to dip


SINGAPORE, May 25 (Bernama) -- Export growth is expected to dip across Association of South-East Asian Nations (Asean) in the next quarter but the region remains resilient, according to a new ICAEW report.

The report, 'Economic Insight: South-East Asia', said rising oil prices, inflationary pressures, a Chinese property bubble and the European sovereign debt crisis were all taking their toll, but the economies continued to grow, albeit at a slower pace.

The report is produced by The Centre for Economics and Business Research (CEBR), ICAEW's partner and forecaster.

The report undertakes a quarterly review of South-East Asian economies, with a focus on the six largest countries; Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.

The report said Malaysia, whose export market has traditionally relied more than its neighbours on Western demand, has been impeded by the sovereign debt crisis but a steady stream of foreign direct investments had mitigated this impact to achieve 5.1 per cent growth in gross domestic product (GDP) last year.

"Strong industrial production in early 2012 continues to keep both unemployment and a decline in living standards at bay.

"Moreover a pick-up in the semiconductor industry, coupled with escalating commodity prices, should push GDP growth to 5.2 per cent this year and further to 5.6 per cent in 2014," it said.

Charles Davis, ICAEW economic advisor and Cebr's head of macroeconomics, said Malaysia was one of the few regional net oil exporters, selling 8.4 per cent of its annual output, and had an export surplus of around 2.5 per cent, after purchasing was taken into consideration.

He said Malaysia therefore stood to gain from rising oil prices. However, he believed that inflation was set to rise further across the region.

"We are now seeing the rise of a newly-affluent Asian consumers, with a higher disposable income and the capacity to afford more and better goods.

"Their growing demands have exceeded what the increasingly scarce amounts of energy and depleting surplus of Chinese labour could previously supply, thus exerting inflationary pressures worldwide.

"While inflation has fallen back in Malaysia through 2012 so far inflationary risks remain, and these will remain on Bank Negara Malaysia's radar," he said.



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