AMRO foresees Asian economies survive well in the face of slightly slowing growth amid global roadblocks to trade.
Growth in the region is expected to slow down to 5.1 percent from 5.3 percent in 2018. But robust consumption and trade between the economies will be supportive. – AMRO report
- The Southeast Asian, Chinese, Japanese and South Korean economies are expected to remain ‘resilient’.
- However, market fears bigger headwinds like escalation of trade tensions, a global slowdown and volatile financial markets.
- AMRO’s report deemed current financial and trade policy positions as ‘appropriate’ for the time being.
- The report warned central bankers to be ready to readjust policies in lieu of promoting growth and maintaining financial stability.
- Growing middle class, rapid urbanization and digitization in the region is evidence of a stable economic environment.
As per the report:
Asean+3 economies are strongly positioned to survive roadblocks that could dampen external demand of their produce. Most countries ‘have adequate reserves and fiscal buffers.
The report saw decent growth, inflation at par with expected numbers, and credit cycles ‘mostly in either the recovery or slowing phase’ and close to trend.
AMRO suggested the countries build on furthering productive capacity, increasing connectivity and creating more depth in the domestic market.
AMRO also encouraged leveraging regional tools such as the Chiang Mai Initiative, to help drive domestic savings, stockpile foreign reserves, and develop human capital and governance.
AMRO is a monitoring unit and adviser to the Chiang Mai Initiative. It was formed as part of an agreement in the wake of the Asian financial crisis. The aim of the initiative is to support stable economic development through an approach to pool resources and help countries that face a liquidity crunch.