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Economy

ASEAN GDP to exceed Japan's by 2030: IHS Markit economist

Forum panelists agreed that further reforms in ASEAN will help boost its position as the growth driver of the global economy.

SINGAPORE -- The combined gross domestic product of the Association of Southeast Asian Nations is expected to reach $8 trillion by 2030, higher than that of Japan, an IHS Markit economist said at a seminar here Thursday.

Rajiv Biswas, an IHS Markit senior director and its chief Asia-Pacific economist, was among the speakers at the Asia Economic Forum, a discussion organized by the U.K.-based economic research and analytics company and Nikkei.

Biswas pointed out that the Nikkei ASEAN Manufacturing Purchasing Managers' Index has shown a slight improvement in recent months, with the figure in August rising by 0.8 point from the previous month, underpinned by domestic demand. He expects ASEAN countries to generate "relatively resilient performance over the next couple of years," backed by ongoing economic reforms in countries such as Indonesia and Vietnam -- including a loosening of restrictions on foreign ownership.

During the panel discussion, Eastspring Investments Chief Investment Officer Boon Peng Ooi expressed confidence in Indonesia, a place where "political reforms are going through" thanks to the country's reform-minded leaders, led by President Joko Widodo. Meanwhile, Richard Jerram, chief economist of the Bank of Singapore, said his top pick for investment in ASEAN is Vietnam, citing demographic dividends and potential upside for the real estate market.

However, the picture is not all rosy. In July, exports for most Asian countries, including Thailand, Singapore, Malaysia and Indonesia, dropped from a year earlier.

The main drag is sluggish global demand, with slower growth in China and stagnant recoveries in the U.S. and Europe the main culprits. Standard Chartered Bank's Asia chief economist and managing director David Mann said the weak performance of the advanced economies is moving "the center of economic gravity [to Asia] even more quickly" than before.

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