Philippines has displaced Indonesia as Asean economic leader -- S&P
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MANILA - The Philippines is now Asean's undisputed economic leader, according to Standard & Poor's (S&P).
“The Philippines, which Standard & Poor's recently upgraded to investment grade, has taken over the Asean growth leadership role from Indonesia,” S&P Asia Pacific chief economist Paul Gruenwald said in a new report released Monday.
Gruenwald said the Philippine economy would grow by 6.9 percent this year, faster than other Asean economies.
According to its forecast, S&P sees Indonesia's gross domestic product (GDP) growing 6.1 percent; Vietnam, 5.3 percent; and Malaysia, 5.3 percent. The Philippine growth forecast is higher than that for China at 7.3 percent.
A measure of economic performance, GDP is the amount of final goods and services produced in a country.
S&P's forecast for the Philippines' GDP growth this year is at the higher end of the government's target range of 6-7 percent.
The credit rating firm said growth however would slow to 6.1 percent next year before picking up to 6.5 percent in 2015.
Philippine GDP grew 7.8 percent in the first quarter of the year, making it the fastest-growing is Asia.
“The major Asean economies we cover -- Indonesia, Malaysia, Philippines, Thailand, and Vietnam -- continue to outperform. These economies are more domestically focused than the newly industrialized economies and therefore tend to do better when global growth is sluggish,” Gruenwald said.
For the entire Asean, S&P expects growth of 5.5 percent through 2015.
In making its forecast, S&P expects a rebound in the US economy later this year and in 2014. The Asean forecsat however remains below trend because of flat growth in Europe, which is Asia's biggest trading partner.
Overall, risks to Asia-Pacific growth remain skewed to the downside, S&P said, adding that a slowdown in China will have a ripple effect on Australia, which is the largest supplier of iron, and other economies that export heavily to China.
Two important risk factors are the pace of Chinese investment and real GDP growth, and the strength of the US economic recovery, S&P said.