Thanks to China’s growing regional influence and ASEAN reforms.
The Asia Pacific region is expected to be a global growth outperformer by 2018 as it is forecasted to post a 4.6% real GDP by next year, a higher figure than the 3.1% real GDP forecast for the global economy, according to BMI Research.
BMI expects that China’s growing influence through its Belt and Road (B&R) initiative will serve to cement its status as a major regional player in the years to come.
Additionally, ASEAN reforms are projected to enhance trade among member countries as they reduce trade and investment barriers within the bloc through the ASEAN Economic Community (AEC) and the Regional Economic Comprehensive Partnership (RCEP).
At a national level, the Indonesian government has announced plans to create a task force that aims for greater ease of doing business at both central and regional levels whilst Thailand’s new constitution should provide policy continuity which will continue the improvements to the country’s business environment.
BMI also pointed out that the next year will bear witness to slowing property markets in Australia, New Zealand, China and Hong Kong as cooling home sales were registered in 2017.
“The combination of still-poor affordability and macro-prudential policies aimed at ensuring financial stability will likely act as a drag on the housing markets across the region. Rising interest rates are also negative for the mainland Chinese and Hong Kong markets,” it added.
However, BMI also noted that 2018 will also be a year where the region will face rising election risks as Thailand, Cambodia and Malaysia prepare for general elections which might bring about uncertainty in business environment and investor confidence.
Moreover, the region could face a growing terror threat over the longer term as Southeast Asia remains the most vulnerable to IS influence due to the large Muslim populations in Indonesia and Malaysia and areas outside central government control in Southern Philippines.
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