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Analysts bullish on Southeast Asia growth in 2006

Key economies seen looking robust, more able to deal with high oil prices, bird flu problems

Analysts bullish on Southeast Asia  growth in 2006

Southeast Asia's key economies are in for robust growth this year, with Vietnam on track to catch up to its wealthier neighbors but Indonesia hobbled by lingering domestic issues, analysts say.

They say risks of a bird flu pandemic, higher interest rates and volatile oil prices remain but regional economies are better prepared than before to withstand any adverse impact.

Singapore, the region's most advanced economy, is expected to continue last year's strong growth momentum, while the Malaysian and Thai economies are also forecast to be on firm footing.

The Philippines is expected to remain buoyant, thanks to the billions of dollars in remittances by overseas Filipino workers, the analysts said at a forum organized by the Singapore-based Institute of Southeast Asian Studies last week.

Song Seng Wun, a regional economist with CIMB-GK Research, expects Singapore's economy to expand by seven percent this year and about five percent over the next two years "on the back of sustained regional and global growth."

The 2006 forecast is well above the government's growth target of three to five percent for gross domestic product (GDP), the total value of all goods and services produced in the country.

Prime Minister Lee Hsien Loong said the city-state's economy grew by a better-than-expected 5.7 percent in 2005.

"We are seeing more broad-based growth, especially within the services-producing sector," Song told the forum of academics, diplomats and business leaders. "After seven years of decline, the construction sector should return to the black from 2006 onwards."

He expects the Philippines to achieve 4.6 to 4.8 percent GDP growth this year, buoyed by foreign worker remittances, which accounted for 11 percent of GDP and 18 percent of current account receipts in the first half of 2005.

The country has about 10 million citizens working overseas.

Malaysia's economy should grow five to six percent this year from an expected 5.3 percent expansion in 2005 due to a recovery in external demand and sustained domestic demand, Song said.

In neighboring Thailand, Supavud Saicheua, managing director of research group Phatra Securities, forecast that country's economy to grow 4.5 percent this year from a projected 4.3 percent in 2005.

Growth in the March quarter should be boosted by a pick-up in agricultural production, tourism and exports. Investments in some mega-projects should help Thailand's economy in the second half, he said.

Supavud cited prolonged political tensions arising from challenges to Prime Minister Thaksin Shinawatra, as well as unrest in southern Thailand, as among the domestic risk factors.

Communist Vietnam's rising economic star should also provide a bright spot for the the Association of Southeast Asian Nations, a 10-member regional bloc.

Adam McCarty, the chief economist of Hanoi-based Mekong Economics, said Vietnam's GDP is expected to have grown at a blistering 8.4 percent in 2005 and will continue to expand above eight percent this year.

"I don't know if 'tiger' is the right label, but it (Vietnam) certainly is a developing country on the path to catching up with the richer ASEAN countries," he told the ISEAS forum.

Corruption remains a "very significant problem" in Vietnam but progress has been made to fight it, he added.

Updated : 2021-05-06 13:07 GMT+08:00