The major Asean economies are likely to deliver higher-than-expected growth this year, but the outlook for 2009 looks challenging, economists said in a published report on Saturday. Morgan Stanley raised its 2008 growth forecast for Singapore, Malaysia, Thailand and Indonesia to 5.6 per cent from an earlier estimate of 5.5 per cent.
The investment bank kept intact its recently upgraded GDP growth projections for Malaysia at 5.7 per cent and Thailand at 5.6 per cent. It jacked up the forecast for Indonesia by half a point to 6 per cent and cut Singapore's from 5.1 per cent to 4.3 per cent, said the breakdown in The Business Times.
A stronger-than-expected global growth backdrop and a relatively slow monetary policy response to emerging inflation risks resulted in the region's 2008 first-half growth being higher than anticipated earlier, Morgan Stanley said.
The Association of South-East Asian (Asean) economies will "face headwinds" next year as higher inflation cuts into purchasing power and capital investment decisions, and export markets soften, the investment bank's outlook said. It cut its 2009 GDP growth forecast for the region to 5.1 per cent, nearly 1 point. Singapore faces the least uncertainty in "terms of what could go wrong relative to market expectations," the economists said, noting it was the only country in the region with a "stable and predictable" political climate.