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ASEAN+3 economy forecast to grow 4.6% this year

The gross domestic product growth of the Association of Southeast Asian Nations (ASEAN) plus China, Japan and the Republic of Korea (ASEAN 3) is likely to reach 4.6% this year and 4.5% next year, according to the ASEAN+3 Macroeconomic Research Office (AMRO)’s latest report.

The growth for ASEAN is forecast at 4.9% and 5.2%, respectively.

The ASEAN+3 region is expected to remain resilient notwithstanding the strong headwinds of weaker external demand and tighter global financial conditions, AMRO Chief Economist Hoe Ee Khor said at a press conference on April 6.

Tourism and intra-regional trade will be boosted by the recovery of China’s economy, helping mitigate softer external demand from the US and Europe, he said.

Domestic demand is expected to remain robust, with household spending to be sustained by rising income and lower inflation, according to AMRO. The organisation anticipated inflation to moderate from 6.5% last year to 4.7% in 2023, before normalising to 3.0% next year.

The region’s growth prospects could be dampened by a spike in energy prices caused by an escalation of the Ukraine crisis, or weaker-than-expected recovery in China, or a sharp slowdown in the US. The US’s continued monetary policy tightening amid mounting financial stability concerns could also heighten financial market volatility and spark contagion fears.

Drawing from the lessons learned from the Asian financial crisis, ASEAN+3 financial systems are now more resilient and well-regulated. However, he said, policymakers need to remain vigilant and continue to rebuild policy buffers and remain flexible if necessary.

In an interview with the Vietnam News Agency’s resident correspondents, Khor said that he is very optimistic about Vietnam’s economic prospects.

Vietnam is one of the countries with excellent achievements in the region, which has achieved a very high growth rate and is attracting a lot of foreign direct investment. However, the growth in the first quarter of 2023 was lower than expected, so the Vietnamese economy was forecast to expand by 6% this year.

AMRO expected Vietnam’s GDP growth to reach 6.5%-7% in the second half of this year, he added.

Source: Lao News Agency