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July 13, 2008

Asean sees growth slowing
The major Asean economies are likely to deliver higher-than-expected growth this year, but the outlook for 2009 looks challenging, DPA quoted economists as saying in a published report on Saturday.

Morgan Stanley raised its 2008 growth forecast for Singapore, Malaysia, Thailand and Indonesia to 5.6 percent from an earlier estimate of 5.5 percent.

The investment bank kept intact its recently upgraded GDP growth projections for Malaysia at 5.7 percent and Thailand at 5.6 per cent.

It jacked up the forecast for Indonesia by half a point to 6 percent and cut Singapore's from 5.1 percent to 4.3 percent, said the breakdown in The Business Times.

A stronger-than-expected global growth backdrop and a relatively slow monetary policy response to emerging inflation risks resulted in the region's 2008 first-half growth being higher than anticipated earlier, Morgan Stanley said.

The Association of South-East Asian (Asean) economies will "face head winds"next year as higher inflation cuts into purchasing power and capital investment decisions, and export markets soften, the investment bank's outlook said.

It cut its 2009 GDP growth forecast for the region to 5.1 percent, nearly 1 point.

Singapore faces the least uncertainty in "terms of what could go wrong relative to market expectations," the economists said, noting it was the only country in the region with a "stable and predictable" political climate.

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