The ICAEW report Economic Insight: South East Asia is produced by Cebr, ICAEW’s partner and economic forecaster. Commissioned by ICAEW, the report provides its 140,000 members with a current snapshot of the region’s economic performance. The report undertakes a quarterly review of South East Asian economies, with a focus on the five largest countries; Indonesia, Malaysia, the Philippines, Singapore and Thailand. Highlights of the Q2 2013 report include:
- Global showdown is catching up with emerging markets
China has eased off its super-charged growth, Brazil struggles to control inflation and to raise industrial output, and oil & gas fuelled Russia appears to lack the energy for future growth. The deceleration of emerging markets, along with depressed Western economies, has pulled commodity prices down and this has affected the export earnings of producers – many of whom are emerging economies.
- Emerging market assets, including ASEAN, have become a beneficiary of low asset returns in government debt
Low returns on government debt are pushing capital to emerging market assets. Combined with growth in credit, inflation and bubbles may form though currently, regional markets look healthy as governments keep a close watch on housing and equity markets.
- Unorthodox monetary policy could come to haunt investors
Quantitative easing is distorting market signals and leads to the mis-pricing of risks. This means that many investors will face unexpected losses when the next significant downturn comes. Cheap money may also cause commodity price inflation, hitting the purchasing power of households around the world. So far, ASEAN has benefitted from the flow of money into the region, but it will also adversely impact the region if the flow reverses.
For more information and a copy of the report, please visit ICAEW’s website.