M'sia to be key beneficiary of rapid Asean growth

Kuala Lumpur: Malaysia is expected to be a key beneficiary of the rapid growth of the Association of South-East Asian Region (Asean), with its exports to other member countries set to grow strongly, helped by Asean Economic Community's trade and investment liberalisation.In a statement Friday, IHS Global Insight, Asia Pacific chief economist, Rajiv Biswas, said by 2025, Indonesia's gross domestic product was expected to reach US$2.5 trillion, creating a large market for Malaysia's goods and services exports.

He said middle class consumer spending was expected to grow rapidly in Indonesia as well as other Asean emerging markets such as Vietnam, Philippines, Cambodia, Thailand and Myanmar.

"This will underpin rapid growth in Malaysia's services sector exports such as tourism, financial services, education and medical services," he said.

Rajiv said Malaysian multinational companies were also expected to continue to expand their international operations across Asean as well as in other parts of Asia and the Middle East, with South-South trade expected to become an increasingly important driver of Malaysian exports.

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On exports, he said, they would continue to play an important role in economic growth, as Asean domestic demand became an increasingly important source of demand for Malaysian exports.

"The rapid growth in the number of Asean middle class households is expected to provide a sustained source of growth in Asean domestic demand.

"Malaysia will also benefit from strong growth of consumer demand in other emerging markets, notably China, whose share of world consumer spending is forecast to rise from eight per cent in 2014 to 15 per cent by 2024," he said.

He said India and the Middle East were also expected to be fast-growing consumer markets for Malaysian exports.

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Rajiv said to fully realise Malaysia's economic potentials and to become a high-income nation by 2020, the country would need to continue its economic reform initiatives, including pursuing the development of strategic growth industries identified under the Economic Transformation Programme.

"These include giving high priority to developing Malaysia's human capital through universities, technical colleges and vocational training programmes, and continuing to develop key physical infrastructure such as urban transport systems, ports, airports and power infrastructure," he said. – Bernama

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