Forecasts for the economy of the Association of Southeast Asian Nations-5 (ASEAN-5) in 2014 have been revised downward as the growth momentum of the region has slowed compared to 2013.
The economic outlook for 2014 of ASEAN-5, comprised of Indonesia, Malaysia, the Philippines, Singapore, and Thailand, has recently been toned down by RHB Research Institute to 4.3 percent from its earlier forecast of 4.7 percent.
The downgrade by the brokerage came after the below-expectations performance of Indonesia, Singapore, Thailand, and the Philippines in the first half of the year as exports weakened and political uncertainty gripped some countries.
Only Malaysia is seen to buck the trend, with its gross domestic product expected to grow 5.4 percent this year from 4.7 percent in 2013, following a strong expansion in the first quarter of 2014, before moderating to 5.2 percent in 2015.
The ASEAN-5 posted a 4.9 percent growth in 2013 and 5.1 percent expansion in 2012, said RHB Research.
But it predicts that GDP growth in the Asean-5 will bounce back in 2015 to 5.1 percent amid expectations of continued global economic recovery.
RHB Research said it expects Indonesia to forge ahead in 2015 as it overcomes political uncertainties with the election of Joko Widodo as the country’s president.
Thailand, meanwhile, will benefit from a return to some sort of normalcy after the military takeover in May, while the Philippines is expected to gain traction from its ongoing reconstruction efforts as it recovers from the devastation inflicted by Typhoon Yolanda in late 2013.
The Singaporean economy is expected to decelerate from last year’s performance because of the slowdown in exports and manufacturing output, as well as a labor shortage.
IMF’s revised prediction
The broker’s forecast is in line with the International Monetary Fund’s (IMF) revision of the ASEAN-5’s economic growth rate amid threats of geopolitical turbulence and rising global interest rates.
The IMF’s latest “World Economic Outlook” report forecasts a growth of 4.6 percent this year for the ASEAN-5 bloc that encompasses Indonesia, Malaysia, the Philippines, Thailand and, instead of Singapore, Vietnam.
This is down from the 4.9 percent forecast it made for the five ASEAN states in April, and comes as it anticipates a milder world economic expansion for 2014 of 3.4 percent from an earlier projection of 3.6 percent.
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