A garment factory in Vietnam (Photo: VNA)In its article, the journal cited the forecast bythe World Bank (WB) as showing that GDP in Vietnam, the Philippines, andMalaysia will grow in excess of 6%, while growth rates of Indonesia and Cambodia areexpected around 5%. Singapore, Thailand, Laos, and Myanmar are all expected togrow around the 3% mark.
Most of this grow has been underwritten by thestrong expansion of exports and a resurgence of local demand and investment. Thereis massive urban development occurring across the region, with tourism veryquickly rebounding after travel restrictions have been lifted. The streets arenow vibrant with crowded markets and restaurants due to a new consumerconfidence.
The major economic shift within ASEAN is the growinglevel of intra-ASEAN trade and investment. This is where the ASEAN grouping maybe partly protected from any world economic downturn.
In the short-term ASEAN has a buffer against anyupcoming international recession. Most economic analysts still believe ASEANwill remain relatively buoyant over the next year.
However, some of the ASEAN countries are facing anumber of potential problems. Although exports have been rapidly growing inIndonesia, Malaysia, and Vietnam, the international economic slowdown coulddampen demand later in the year and 2023.
Weakening currencies, increasing public and privatedebt, rising energy costs, and a massive expansion of the money supply over thelast two years has fuelled a bout of inflation.
ASEAN’s economic resurgence has created some chroniclabour shortages in Singapore, Malaysia, and even Thailand. This could hamperpotential construction and manufacturing growth, if these issues are notresolved.
The challenges ahead for ASEAN will be keeping debtand inflation in control, dealing with lower export and foreign investmentgrowth, dealing with eroding currency exchange rate rates, and another bout offoreign currency speculation, if the world goes into a deep recession./.
VNA
