The Southeast Asian economy is recovering, posting the sharpest growth in a year and a half in the April-June quarter.
The real gross domestic product of five major countries in the region—Indonesia, Thailand, Malaysia, Singapore and the Philippines—expanded 4.6% from a year earlier, surpassing the 4.4% growth seen in the January-March quarter, according to an estimate by the Asian Development Bank. The figure was derived from a weighted average of the nations’ growth rates, CNBC reported.
China’s economic slowdown had damped exports from Southeast Asia, keeping the region’s economy at a standstill. But signs of recovery are cropping up as governments increase fiscal expenditures.
The Philippines outshone larger peers to emerge as Asia’s fastest-growing economy during the second quarter. Sustaining that pace may prove more difficult.
Annual growth hit a three-year high of 7% during the April-June period, according to government data on Thursday, building on a 6.9% spike in the first three months of the year. The second-quarter performance was better than China’s 6.7% annual expansion.
Indonesia’s latest figure exceeded January-March’s 4.9% and beat the market projection of 5%. Growth is not limited to the central island of Java, where the capital city of Jakarta is located. The island of Sulawesi, in central Indonesia, recorded 8.5% growth thanks to President Joko Widodo’s push to boost infrastructure development in rural areas.
Thai Optimism
India, which is yet to report figures for the comparable period, boasted Asia’s fastest annual growth for the first three months of the year at 7.9%.
Thailand’s economy, which had been suffering from political instability, grew 3.5% in the April-June quarter, marking a second consecutive quarter of improvement.
The export slump was offset by increased government spending on roads, railways and other infrastructure, according to the ADB.
Thai businesses are optimistic of economic growth next year as the service and industrial sectors boom, while their confidence that the economy will improve during the final two quarters of this year is also rising, a survey by the University of the Thai Chamber of Commerce has found.
In its survey of 600 enterprises, the UTCC found that businesspeople still had confidence that the economy would grow more strongly next year on rising sales in the tourism and service sectors, followed by the manufacturing sector. However, the agricultural sector has not brightened much yet despite higher crop prices, as farmers still have low incomes compared with several previous years.
Meanwhile, Malaysia’s growth shrank for a fifth straight quarter, falling to 4% from January-March’s 4.2%.
