ASIA FASTEST GROWING REGION IN 2015

Improving fundamentals, successful reform programmes and, last but not least, lower oil prices will make emerging Asia once again the fastest growing region in the world in 2015, according to forecasts by international economic institutions such as World Bank, Asian Development Bank (ADB) and International Monetary Fund (IMF).

Studies show that the region will enjoy average GDP growth of nearly 7% in the coming year, which is by far stronger then the forecast for the entire Asian continent at 4.5%.

This is mainly driven by growth expectations for China, which  although slightly reduced to 7.1% from 7.4%  are still crucial for the region’s entire economy.

Besides that, Southeast Asia is seen as a particular bright spot in terms of stronger economic development due to various other factors. Indonesia, the largest economy in Southeast Asia, has introduced widespread economic reforms and generally sees robust private consumption.

Malaysia has caught up due to improving exports and a strong labour market, and Thailand is expected to overcome its politically induced economic slowdown in 2015 due to higher government spending in infrastructure and attempts to create room for productivity-enhancing investments.

The winner in Southeast Asia, however, seems to be the Philippines. The formerly “sick man of Asia” has obviously recovered well under the presidency of Benigno Aquino III and is expected to be among the fastest growing countries in the region.

The Philippines posted 5.3% GDP growth in the third quarter of 2014, behind Malaysia’s 5.6% and Vietnam’s 6.2%, but is expected to post 6.7% GDP growth in the coming year. This is due to the country’s improved economic fundamentals, increased inflow of foreign direct investments and buoyant remittance activity from Oversea Filipino Workers which pushes up private consumption.

The growth outlook for Myanmar has been originally slightly higher than the forecast for the Philippines as per ADB figures, but economists believe that the country’s growth will slow down due to its increasing trouble to contain inflation and the devaluation of its currency. However, institutional and policy reforms, along with continued strong foreign investments, are expected to keep Myanmar on track.

Growth in the 5 to 6% range is expected for Vietnam, while GDP expansion in Cambodia and Laos should be around 7%, albeit from a significantly lower level.

Singapore and Brunei will be the slowest growing countries in the region.