Malaysia predicts 7.2% ASEAN growth in 1997

Malaysia predicts 7.2% ASEAN growth in 1997

KUALA LUMPUR (AFP): ASEAN economies are expected to post
higher economic growth averaging 7.2 percent in 1997, a Malaysian
government report said yesterday.

The Association of Southeast Asian Nations (ASEAN), which
groups Brunei, Indonesia, Malaysia, the Philippines, Singapore,
Thailand and Vietnam, is expected to post a 7.0 percent growth
this year, it said.

According to the finance ministry's annual economic report,
ASEAN growth in 1997 will be fueled by improved exports, high
rates of investment and domestic demand.

Growth will be achieved amid low inflation, which is expected
to ease to 4. 6 percent next year from 4.8 percent in 1996 and
5.4 percent last year, it said.

ASEAN's current account deficit is also expected to narrow to
US$16.1 billion next year from $20 billion this year and a
shortfall of $22.2 billion last year, the report said.

The grouping is expected to remain attractive to investors as
efforts are further intensified to promote intra-ASEAN trade and
other foreign direct investment (FDI).

This year, overall export growth in the region is expected to
fall slightly, due to a moderating US economy, a modest outlook
for Europe, a global semiconductor glut and loss of
competitiveness due to rising currencies.

But total ASEAN trade is expected to remain vibrant, rising 13
percent to $696.7 billion this year from $616 billion in 1995,
given the steadier inter-regional trade and investment, the
report said.

It projected FDI flows into ASEAN to reach $75 billion this
year with continuing liberalization of investment regimes in
member states and the privatization of infrastructural projects.

Total investment figures for 1995 were not provided.

But the report said that last year, Japan was the top investor
in ASEAN accounting for $13.5 billion, followed by the United
States with $9.6 billion, Britain with $7.6 billion and Taiwan
with $2.4 billion.

Economic cooperation and investments at the intra-ASEAN level
have also accelerated with the formation of regional growth
triangles, the report said.

Malaysian firms are expected to invest 11.8 billion ringgit
($4.72 million) in joint ventures in the region between 1994 and
1996, mainly in utilities and infrastructure projects, it added.