‘Asean may see 4.9pc GDP growth from 2017’ Countries need to continue moving up global value chain, says economist

KUALA LUMPUR: Southeast Asian countries including Malaysia are expect to grow at 4.9 per cent from next year to 2021, before easing to 4.4 per cent from 2022-2026, according to global research group The Conference Board.

“Against the backdrop of a subdued global growth environment and deteriorating domestic demand, many Southeast Asian economies have either implemented fiscal and monetary easing measures to support growth or rolled out economic reform plans to restore business confidence and attract foreign investment,” said its chief economist Bart van Ark, here, yesterday.

“Increased government infrastructure project spending, household consumption due to tax breaks and business investments may start to take effect in these economies in the next five years.”

He said that the combination of the formation of the Asean Economic Community last year as well as the inclusion of Asean countries into the China-lead Asian Infrastructure Investment Bank this year show some promise when it comes to the creation of more consumer purchasing power.

PROMISING:

He stressed as well that all Southeast Asian countries need to continue advancing and moving up in the global value chain, develop a stronger orientation towards innovation, create more deep-seated reforms in the labour market and further strengthen its human capital performance to sustain growth into the 2020s.

Van Ark says the Malaysian growth story will mainly be sustainable through a focus on two areas.

“Firstly, teh country needs to look beyond quantitative measures and start focusing on qualitative measures such as labour quality, capital quality and total factor productivity, rather than just quantitative growth.

“Secondly, growth performance will be strongly driven by New Digital Economy, given its deep penetration of the Internet and smart devices.”