The economic recovery in Southeast Asia is expected to gather momentum with broad-based growth of nearly six percent likely this year, the region's finance ministers said on Wednesday.
The finance ministers from the 10-member Association of South East Asian Nations (Asean) said their economies were drawing strength from both external demand for the region's exports and rising domestic spending.
"We expect our region to continue its growth momentum in 2004 with a projected GDP (gross domestic product) growth of 5.5 to 5.9 percent," the ministers said in a joint statement issued at the end of their annual meeting in Singapore.
"Growth is expected to be broad based, with both domestic and external demand providing the impetus for expansion."
But despite the improved outlook for the global economy the ministers said risks existed, particularly from growing current account and fiscal imbalances in some of the major industrial economies which could cause volatility in financial markets.
"Asean is now back on its feet, up and running again," said Singapore's finance minister and deputy prime minister, Lee Hsien Loong, in his opening address to the meeting.
Lee said Southeast Asian nations needed to accelerate the integration of their capital markets to attract investment that is increasingly heading to China and India.
The economically disparate grouping should also allow "pathfinders" to push ahead on developing financial market initiatives without having to wait for all Asean members to be ready, said Lee, who is expected to become prime minister of Singapore this year.
Less than a decade ago, Asean nations were a favoured destination for foreign investors, but the Asian crisis of 1997/98 and the emergence of China and India meant the region now had to work hard to stay on the investment radar screen.
ASEAN finance ministers plan joint roadshows to Europe and the United States to promote investment opportunities in the region.
Malaysia's finance minister told reporters on the sidelines of the meeting that there were no convincing arguments yet to change the country's currency peg of 3.8 ringgit to the dollar.
Nor Mohamed Yakcop, the country's second finance minister and the architect of the peg, said the ringgit had moved by less than four percent against the Thai baht and the Singapore dollar since Malaysia pegged its currency in September 1998.
"We have not seen any convincing argument, any convincing reason for us to change the peg," he told a news conference.
But he added that the government would review the peg if it was in Malaysia's national interest to do so. "We are not in love with the peg," Nor Mohamed said.
Asean groups Singapore, Malaysia, Thailand, Indonesia, the Philippines, Brunei, Cambodia, Laos, Vietnam and Myanmar.
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