Data on Thursday is expected to show the economy expanded by 1.1 percent in April-June from the first three months of the year, down from first-quarter growth of 2.5 percent, which was a two-year high, according to a Reuters poll of economists.
From a year earlier, the Philippines economy probably grew 5.7 percent, weaker than the first quarter's 6.4 percent surge but still far stronger than most developed countries and some much larger emerging economies such as Brazil and Russia.
Riding a wave of strong domestic consumption, higher public spending and investment inflows, much of Southeast Asia was strikingly buoyant in the second quarter, with Indonesia, Malaysia and Thailand all posting stronger-than-expected economic expansions. Tiny, trade-reliant Singapore has been the
only outlier, struggling to avoid slipping back into recession.
While export data may not be pretty in coming months, economists say longer-term fundamentals remain strong enough in the region to continue attracting foreign investors.
"There is a re-rating going on in Indonesia and the Philippines, with Indonesia recently upgraded to
investment-grade (credit) status and the Philippines right behind. Things have really clicked in those economies," said ING economist Tim Condon in Singapore.
"Unless you get a September 2008-style global panic, there is enough resilience in these countries' domestic demand to offset export weakness," Condon said, noting he expected external demand would stagnate for the rest of the year before stabilising in 2013.
GLOBAL RISKS, REGIONAL RESILIENCE...FOR NOW
governments with healthy finances which are willing and able to spend.
The Philippines, where money sent home by citizens working abroad fuels domestic consumption, in June received the biggest amount for any month, $1.81 billion. That took remittances in the first half of 2012 to $10.1 billion, up more than 5 percent from last year.
Government spending in the first seven month of 2012 -- excluding interest payments -- surged 15.2 percent from a year earlier, also helping offset the impact of faltering exports and weaker farm output.
In Indonesia and Malaysia, the story is much the same: there are jumps in consumption as well as surging public and private investment.
Condon at ING expects Indonesia's economy to grow by around 6 percent this year and the Philippines by 4.5 to 5 percent, with solid outlooks for 2013, but added that Malaysia's trajectory may be more uncertain if the government ratchets back spending after coming elections, which are due by April.
Indonesia's growth has been so robust, in fact, that the central bank recently publicly rejected concerns among some market watchers that the economy is overheating.
The central bank forecasts full-year loan growth at 25-26 percent this year, and investors have been pouring into its equity and debt markets.
Some economists say the central bank will need to tighten policy by the end of the year to dampen surging demand for imports that created a record trade deficit in June. But most see pro-growth Bank Indonesia keeping record low interest rates into 2013, to allow local consumption to keep the economy
buoyant.
The government expects spending by a burgeoning middle class and foreign investment interest to keep growth at between 6.3 percent and 6.5 percent this year and to drive it higher to 6.8
percent next year.
Thailand is more of an enigma, with weak global demand biting deeper just as industry looks to fully recover from devastating floods in late 2011. Still, the local stock market is the best performer in Asia, having surged more than 20 percent so far this year.
The government reported on Wednesday that exports fell 4.46 percent in July from a year before as Europe's debt crisis stifles demand.
Even so, unless there is a sharp deterioration in the euro zone, Thai GDP is likely to see solid growth of 5.7 percent thisyear, according to the central bank.
In part, that reflects a return to normality after a series of unnatural events that buffeted the economy in 2011, starting with the Japanese earthquake and tsunami in March and the disastrous flooding at home that closed seven huge industrial estates from October.
Exports account for more than 60 percent of Thailand's gross domestic product each year, compared with around 20 percent for Indonesia, where domestic consumption accounts for about 55 percent of GDP.
(Additional reporting by Neil Chatterjee in JAKARTA, Alan Raybould in BANGKOK and Kevin Lim in SINGAPORE; Writing by Kim Coghill; Editing by Richard Borsuk)
0 comments:
Post a Comment