ASEAN losing steam: Moody’s Analytics
The downbeat global environment will weigh on growth across all five ASEAN members
A research unit of Moody’s Investors Service said in a report that the deteriorating external situation will cap ASEAN growth below trend at about 4.8 per cent in 2011, and slightly weaker in 2012.
“Thai industry is growing at two speeds, with producers selling to the domestic market faring better than their export-dependent counterparts — textiles, clothing and electronics are feeling the pinch from a weaker global economy. The floods in Thailand, set to last another four to six weeks according to government estimates, are expected to shave up to 1 percentage point from 2011 GDP growth, pushing the forecast below 3 per cent on year (currently 3.7 per cent),” the report said.
The report, completed by Katrina Ell and Fred Gibson, associate economists, highlighted the impact in the second quarter from weaker global demand and supply chain disruptions following Japan’s natural disaster. In the quarter, Singapore was hardest hit, growing 0.9 per cent on year, after expanding 8.3 per cent in the March quarter. Electronics production was the main source of weakness as the disaster left Singaporean firms dependent on Japanese inputs unable to meet production targets. In the Philippines, industrial production was hit via its key electronics sector. In the four months following the catastrophe, production grew an average of 3.2 per cent on a year-ago basis, a marked slowdown from 14.5 per cent in the four months prior.
“Softer global growth will drag on export-oriented industries for the remainder of 2011 and well into 2012,” it noted.
ASEAN’s tech-dependent economies appear to be faring badly as the deteriorating global environment has crimped demand for…
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