Singapore
is likely to benefit from Indonesia’s strong domestic growth
through increased tourism, but economic growth in the country is
expected to remain relatively weak, according to a new ICAEW report.
The
ICAEW report Economic Insight: South East Asia is produced by Cebr,
ICAEW’s partner and forecaster. Commissioned by ICAEW, the report
provides its 140,000 members with a current snapshot of the region’s
economic performance. The report undertakes a quarterly review of
South East Asian economies, with a focus on the five largest
countries; Indonesia, Malaysia, the Philippines, Singapore and
Thailand.
According
to the report, the increased integration of the region has also led
to more intra-regional travel. Between 2007 and 2011, tourist
arrivals from outside the region grew by 28.6% while intra-regional
travel grew by 34.5%. Singapore and Malaysia together accounted for
nearly two-thirds of intra-ASEAN travels in 2011, with most trips
being of short duration and between the two countries.
The
appeal of each country to its regional neighbours varies, however,
with the Philippines only receiving 8% of visitors from the region
while 80% of visitors to Laos came from ASEAN.
Singapore’s
economy is expected to grow by about 2.6% in 2013 but a rise in world
trade, combined with benefits from the free trade agreement with the
EU, suggests the country could see growth of about 3.4% in 2014.
ICAEW
Economic Advisor and Cebr’s Chief Executive, Douglas McWilliams,
said: “The global economy as a whole remains unstable, but ASEAN
nations find themselves in an ‘economic sweet spot’ of manageable
inflation, moderate interest rates, and rising prosperity feeding
through to increasing household consumption.”
“One
success story for the region is tourism; a major industry for South
East Asia, which is renowned for its rich history and natural beauty.
Tourism is not just a major employer but also provides substantial
foreign currency earnings, so the rise is a boost to the region’s
economies. A big boost has come from intra-regional travel, including
business travel, which has grown by over a third in the last four
years, supporting significant economic development. Based on the
current numbers, and barring extraordinary setbacks, we would expect
to see ASEAN continue to outpace the global economy for the
foreseeable future.”
The
region has now overtaken Japan as the third largest customer of
China. Though exports to Europe have fallen, sales to ASEAN inflows
have risen to a point where it more than compensates for this.
Mark
Billington, Regional Director, ICAEW South East Asia, said: “As
ASEAN economies continue to grow, they are beginning to play a larger
and more pivotal role in the global economy and marketplace. With the
increased purchasing power from a rapidly growing middle class, the
region will become one of the most dynamic parts of the world.”
