ASEAN economic recovery remains robust: OECD

Photo: AFP

Southeast Asia is showing signs of moderate rebound after the global financial crisis but will remain robust, the OECD has said.

Both leading and coincident indicators for economies in the Association of Southeast Asian Nations (ASEAN) show steady growth is based on sound exports, strong domestic demand and improved business sentiment, the Organisation for Economic Cooperation and Development (OECD) said in its latest quarterly business report.

The OECD, a Paris-based international economic organisation comprising 33 of the world’s richest countries, based its forecast on data from five ASEAN nations, including Indonesia, Malaysia, the Philippines, Singapore and Thailand .

However, leading indicators suggest that growth in many ASEAN countries, while still robust, may be weakening in the next quarter, it said.

According to the report, signs of a slowdown in the Chinese economy, a key export market, constitute a negative factor for the outlook for ASEAN economies, while uncertainty about growth prospects for OECD economies remain.

OECD's forecast is in line with projections by officials and private sector economists that the pace of the region's economic rebound is likely to ease in the second half of the year, although full-year growth will remain strong.

While the OECD report did not contain projections for gross domestic product (GDP) growth in ASEAN this year, Singaporean officials have said they expect the island nation’s economy to surge by up to 15 percent.

Indonesia 's economy is expected to expand 6.0 percent and Malaysia should exceed 6.0 percent GDP growth this year, according to official estimates.

ASEAN's other members are Brunei, Cambodia, Laos, Myanmar and Vietnam.

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Global economic recovery is slowing

PARIS – Global economic recovery is slowing faster than expected and extra stimulus from governments may be needed, the OECD warned on Thursday.

Growth in the Group of Seven leading industrialised economies could slow to an annual rate of 1.5 percent in the second half of the year, the Organisation for Economic Cooperation and Development said in an interim assessment.

"Recent high-frequency indicators point to a slowdown in the pace of recovery of the world economy that is somewhat more pronounced than previously anticipated," the OECD said.

But the report also said that such an evaluation was subject to "great uncertainty" and that it remained unclear if the slowdown reflected temporary factors or whether it signalled deeper constraints.

It said that if the trend were deemed to be temporary, governments should withdraw their monetary support "for a few months" while continuing to curb public spending.

But on the other hand, if the latest sluggishness proved to be longer lasting, governments could boost stimulus measures, for example by continuing central bank purchases of corporate debt and maintaining interest rates close to zero.

The report added that if public finances permitted, planned budget cuts could be delayed.

The OECD said in the months ahead consumer spending, the principal motor in many advanced economies, could be constrained by unemployment and falling housing prices.

In addition, "a weak economy and uncertainty in sovereign debt markets might also affect adversely the financial system and private demand growth."

But the OECD also noted that the global economy could take advantage of several strengths, in particular robust corporate profits, inventory levels that should not warrant "a renewed rundown of stocks" and stablised overall financial conditions in most industrialised countries.

In its country-specific forecasts, the OECD foresaw growth in the United States of 2.0 percent in the third quarter this year and 1.2 percent in the fourth.

Japan should experience growth of 0.6 percent in the third quarter and 0.7 percent in the fourth.

For the eurozone, based on an average of the three largest members, Germany , France and Italy , the comparable figures are 0.4 percent and 0.6 percent.

 

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OECD praises drive to cut red tape

HA NOI — One of the world's leading economic advisory groups, the Organisation for Economic Co-operation and Development (OECD), has praised the success of a two-year-old project to simplify State bureaucratic procedures in Viet Nam.

Known as Project 30, the three-year project was establied by Prime Minister Nguyen Tan Dung in 2007.

Under it, Viet Nam has already slashed about 30 per cent of all existing red tape.

The head of an OECD delegation that recently visited Ha Noi, Josef W.Konvitz, acknowledged that the project was playing a criti cal role in reforming public servic procedures.

Accordingto the PM's special Task Force for Administrative Procedures Reform, Konvitz said that Project 30 had already reviewed and simplified 10,000 sets of communal adminis trative procedures and 700 sets of district-level documents, slashing them down to a bare 63 sets of documents each.

This amounted to about 30 per cent of the red tape in all bureaucratic procedures.

Konvitz warned that the challenge now was to complete the reforms otherwise the situation could revert back to the complicated ways of the past.

During a working session with Vietnamese officials to assess progress, Konvitz acknowledged the commitment of the Government to achieving the reforms.

"Everybody has been working hard for the success of the project," Konvitz said.

"A few people doing business in Viet Nam have told me they are glad the project is underway and are grateful for being consulted on their experiences with administrative procedures."

Ngo Hai Phan, deputy head of a working group set up to initiate the reforms throughout the nation, said that all ministries, industries and localities nation-wide had managed to review administrative procedures as required by the Prime Minister.

The OECD and the Government Office are now assessing the progress of the reforms from 2007 to 2010. The results will be a reference for completing the programme from 2011 to 2020.

An OECD report is scheduled to be presented in November. — VNS

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