Moody’s forecasts PH, Malaysia as leaders of regional growth

By , on September 3, 2014

Shutterstock photo
Shutterstock photo

Moody’s Analytics, the research affiliate of Moody’s Investor Service, has forecast that the Philippines and Malaysia will lead Southeast Asia’s economic growth for the rest of the year, with the rest of the region expected to catch up by 2015.

The economic research and financial services company said that the growth will be due to the economies of the Philippines and Malaysia being bolstered by advanced markets’ improving situation.

It added that the economic growth of the rest of the region, meanwhile, is affected by various issues, specifically the political uncertainty in two of the region’s biggest economies, Indonesia and Thailand.

However, tighter integration in 2015, paired with an increased demand from the region’s major trading partners will contribute to making Southeast Asia more prosperous, overshadowing risks that could lead to a decline, Moody’s noted.

“The US economy is on a sustained uptrend and the Chinese economy is responding positively to the government’s stimulus,” Moody’s analyst Fred Gibson said in a note to clients yesterday.

Regional growth for 2014 was pegged at 4.3 percent, a slower rate than the average of previous years. But Moody’s said that come 2015, Southeast Asia’s economic drive is forecast to return to “trend” at 5 percent, propelled onward by booming global demand and strengthened domestic growth.

At the front of the race toward economic growth, ahead of the rest of the region, are the Philippines and Malaysia, which both had an upturn of 6.4 percent in the second quarter of the year ; “a trend we expect to continue over the next 12 months,” Moody’s said.

“Sound fiscal and monetary policies have been key drivers of growth. Malaysia’s domestic economy is firing on all cylinders, while the Philippines has shrugged off the effects of last year’s typhoon,” the note read.