Panellists speak at the AMRO seminar (Photo: VNA)Hanoi (VNA) – The economic growth of the ASEAN+3 region,including 10 member Southeast Asian nations and the Republic of Korea, Japanand China, is expected to remain resilient in the long run despite escalatingglobal trade tensions and external headwinds, according to the latest reportreleased by the ASEAN+3 Macroeconomic Research Office (AMRO) on May 1.
The ASEAN+3 Regional Economic Outlook 2019 quoted Dr Hoe Ee Khor, AMRO ChiefEconomist, as saying while regional growth is softening to 5.1 percent in 2019and 5 percent in 2020 from 5.3 percent in 2018, the long-term economicfundamentals remain intact.
“Regional policymakers should stand ready to use available policy space to easemonetary and fiscal policies to mitigate the downside risks and support theeconomy if external conditions were to worsen,” he said.
He suggested prioritising longer-term policies, especially those focused onbuilding capacity and connectivity to leverage the Fourth Industrial Revolution(Industry 4.0) and sustain growth in the new economy.
AMRO pointed out three key challenges to regional growth, including thefunding, foreign exchange and factor gaps.
The funding gaps capture the shortfalls between the low domestic savings andlarge investment needs of lower-income economies.
The foreign exchange gap has to do with the financing constraints on emergingeconomies arising from the need to accumulate foreign reserves to mitigaterisks related to sudden capital flows.
The factors gap captures non-financial constraints, including the need todevelop human capital, expertise, technological capacity, and governanceframeworks.
To address these challenges, ASEAN+3 economies need to leverage intra-regionalsavings and investments; strengthen regional financial safety nets, includingthe Chiang Mai Initiative Multilateralisation (CMIM); and redouble efforts todevelop the region’s technological capacity, professional expertise in variousfields and institutions, according to the report.-VNA
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