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Asia exports less dependent on G3 countries
Publication Date : 30-10-2012
Asia’s exports have been less dependent on Group of Three (G3) countries and much more driven by Intra-Asia and Emerging Markets, according to a reserach organisation.
Two-thirds of the exports in this region were going to emerging economies, said Maybank Kim Eng Research Pte Ltd managing director and regional head of research and economics P.K. Basu.
“Asia has had consistent current account surpluses since 1998 and China since 1994. Malaysia still has a large account surplus coupled with robust foreign direct investments inflows,” he said during his presentation at a panel discussion titled "Global Economic Challenges - How these will impact on Malaysia and the Region" at the 17th Capital Market Summit in Kuala Lumpur.
The other panellists were Finance Ministry deputy under secretary, economics and International division Mohd Esa Sbd Manaf and Affin Investment Bank chief economist Alan Tan. Asli Centre of Public Policy Studies chairman Ramon Navaratnam moderated it.
The G3 nations comprise the United States, Japan and the economies of the eurozone.
Although Basu was optimistic on Malaysia, he said Malaysia’s fiscal deficit of 4.5 per cent to 5 per cent of gross domestic products remains large and that would present a medium-term challenge to the country.
Additionally, he said private investment had been lagging in the last decade. However, he said the private investments have been showing recovery in the past five to six quarters.
Tan said there was still a lot of uncertainty and volatility emitting from Europe going into 2013.
He opined that Europe would still continue to be in crisis while the US market was seeing some stabilisation.
He said the eurozone crisis continued to raised uncertainties for not only Europe but the global economy.
Nevertheless, Tan expected Overnight Policy Rate to be unchanged at 3 per cent throughout 2012 and into 2013.