ASEAN Well-Positioned to be ‘Growth Nucleus’ in Asia
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Over 80% of businesses in Australia, Europe, and the US are expecting trade and investment with the ASEAN region to increase over next five years, according to a new report by EY.
Entitled “EY Rediscover ASEAN: A Growth Story of 10 Countries”, the report also reveals that bilateral trade between Chinese companies and ASEAN is projected to hit US$1 trillion (S$1.4 trillion) by 2020, with ASEAN-based infrastructure investments to reach US$110 billion per annum until 2025.
Based on the report’s findings, member countries expected to post gross domestic product (GDP) growth rates of over 3-8% over the next five years and enjoy a compound annual growth rate (CAGR) of 5.1% from 2017 to 2021 collectively. Total trade has already in the past decade increased steadily by a CAGR of 6.4% to US$2.3 trillion in 2015 – and the emerging markets of Cambodia, Laos, and Myanmar are further expected to exceed 7% over the next five years.
On the other hand, developing markets (Indonesia, Malaysia, Philippines, Vietnam) are projected to generate a steady CAGR of 5-6% within the same time frame.
“At a time of volatility in various parts of the world, ASEAN may well be the prized ecosystem of certainty, consistent and resilient economic growth. The region is well-positioned to be a growth nucleus in Asia, even as China and India continue to power ahead,” comments EY ASEAN assurance leader, Dato’ Abdul Rauf Rashid.
Yeo Eng Ping, EY ASEAN tax leader, notes ASEAN’s robust economic dynamics in addition to a relatively young and diverse multilingual talent pool, burgeoning middle-class segment and a strong investment pipeline of infrastructure development projects – all of which present wide opportunities for investors to participate in her economic development.