ASEAN Outlook: Slower Momentum
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The Southeast Asia economy has enjoyed a solid run in the last two years with GDP growth of 5.2% in 2017 and 2018. This followed a 4.6% average annual pace in the three years to 2016 and was just a touch below the pace set in the decade prior to the 2008-2009 global financial crisis. Much of this improvement in the past two years can be attributed to the synchronized global upturn that emerged in the second half of 2016, which provided the impetus for a rebound in export and manufacturing activity throughout the region. However, with the global upturn past its peak and downside risks seemingly mounting, Southeast Asia’s pace of growth will slow in the coming year. Central banks across the region are largely following the lead of the Federal Reserve with a less hawkish tone in 2019. The Philippines will likely be positioned to ease monetary settings this year, while Indonesia and Malaysia will hold steady. Developments in China loom large for the ASEAN region, as it is the top export destination for most ASEAN economies. Despite Beijing increasingly turning to stimulus, signs of China’s economy stabilizing are not prevalent
