Economic growth in Emerging Asia, the ten member countries of the Association of Southeast Asian Nations (ASEAN), China and India, is expected to remain stable in the near term. Average real gross domestic product (GDP) in the region is expected to grow by 6.6% in 2018 and 6.5% in 2019, because of generally robust consumption and investment according to projections in the OECD Development Centre’s Update to the Economic Outlook for Southeast Asia, China and India 2018. The ten ASEAN economies are expected to see average growth of 5.3% in both 2018 and 2019, with the highest rates in Cambodia, Lao PDR and Myanmar (the CLM countries), Viet Nam and the Philippines.
Overall, the external positions of Emerging Asian economies remain stable; current account balances have improved in most economies in the region and foreign direct investment data flows are strong. Policy rates in the region have been increased, mainly in response to increases in inflationary pressure and weakness in some local currencies, though monetary authorities have also used reserve requirements to maintain liquidity. Overall, the fiscal positions of Emerging Asian economies are relatively sound. The fiscal policy direction, however, is mixed.
According to the Update, risks include the effects of rising interest rates in advanced economies, uncertainty about the implementation of planned infrastructure projects and the consequences of rising protectionist sentiments internationally on regional integration.
“Emerging Asia stands to show continued strong growth in the near term if domestic and external risks are properly managed,” said Mario Pezzini, Director of the OECD Development Centre and Special Advisor to the OECD Secretary-General on Development, while launching the Update at the OECD headquarters in Paris.
A special chapter of the Update addresses the challenges and opportunities facing Emerging Asia in developing cross-border e-commerce. The region is already a major player in e-commerce, and should continue to contribute to the sector’s global growth in the future. The use of information and communications technology (ICT), ICT infrastructure, transportation and logistics, payment systems, and legal and regulatory frameworks will all affect such future growth. To benefit from fair and efficient cross-border e-commerce, governments in the region will need to improve connectivity, develop skills and human capital, implement new policies to address digital security and consumer protection, and foster regional and international co-operation.