From The Jakarta Post
online at http://www.thejakartapost.com/detaillatestnews.asp?fileid=20060108130428&irec=8 Southeast Asia headed for robust growth in 2006: Analysts
SINGAPORE (AFP): Southeast Asia's key economies are in for robust growth this year, with Vietnam on track to catch up to its wealthier neighbors but Indonesia hobbled by lingering domestic issues, analysts say.
They say risks of a bird flu pandemic, higher interest rates and volatile oil prices remain but regional economies are better prepared than before to withstand any adverse impact.
Singapore, the region's most advanced economy, is expected to continue last year's strong growth momentum, while the Malaysian and Thai economies are also forecast to be on firm footing.
The Philippines is expected to remain buoyant, thanks to the billions of dollars in remittances by overseas Filipino workers, the analysts said at a forum organized by the Singapore-based Institute of Southeast Asian Studies (ISEAS) last week.
Song Seng Wun, a regional economist with CIMB-GK Research, expects Singapore's economy to expand by seven percent this year and about five percent over the next two years "on the back of sustained regional and global growth."
He expects the Philippines to achieve 4.6 to 4.8 percent GDP growth this year, buoyed by foreign worker remittances, which accounted for 11 percent of GDP and 18 percent of current account receipts in the first half of 2005.
Malaysia's economy should grow five to six percent this year from an expected 5.3 percent expansion in 2005 due to a recovery in external demand and sustained domestic demand, Song said.
In neighboring Thailand, Supavud Saicheua, managing director of research group Phatra Securities, forecast that country's economy to grow 4.5 percent this year from a projected 4.3 percent in 2005.
Communist Vietnam's rising economic star should also provide a bright spot for the Association of Southeast Asian Nations (ASEAN), a 10-member regional bloc.
Adam McCarty, the chief economist of Hanoi-based Mekong Economics, said Vietnam's GDP is expected to have grown at a blistering 8.4 percent in 2005 and will continue to expand above eight percent this year.
ASEAN's biggest member, Indonesia, should grow 5.0 to 5.7 percent this year, according to the country's central bank.
While this may seem respectable, it is not enough to make a significant impact on reducing poverty and unemployment, Indonesian business executive Noke Kiroyan told the forum.
President Susilo Bambang Yudhoyono had initiated reforms, but "it is clear that Indonesia is facing a lot of issues," Kiroyan said, listing the huge government debt, contradictory laws, corruption in the judiciary, budgetary pressures and a lumberingbureaucracy as among the key problems. (***)