Strengthening Monetary and Financial Cooperation
The economic performance of ASEAN countries show a wide variation and the economic prospects are mixed. Noted in the World Economic Outlook (IMF 2014), Indonesia and Thailand, among the core countries within the bloc (that is, Indonesia, Thailand, Malaysia, Singapore, the Philippines and Vietnam), will grow slower than expected. In particular, political uncertainties in Thailand will drag down public investment, while Indonesia will be impacted by an adverse growth inflation trade-off. Malaysia and Philippines will, however, be on a positive growth path.1 Notwithstanding the differing growth scenarios, the ASEAN as a whole will continue to be well-positioned to take advantage of the process of global financial market rebalancing. It may be noted that the core ASEAN group counts on around US$ 775 billion in international reserves to counteract any potential stress in emerging market financial asset (IMF 2014). In terms of financial sector’s health, most economies in the region have well capitalized banking sectors with satisfactory profitability and high asset quality. This apart, debt sustainability is not an issue of concern as the ASEAN gross public sector debt averages 46 per cent of GDP (ibid.).