TOKYO -- Economists are trimming their growth forecasts for several Asian countries for 2016 and beyond, with the U.K.'s vote to leave the European Union clouding global prospects, a new survey shows.
The Japan Center for Economic Research and Nikkei conducted the quarterly consensus survey from June 14 to 30. The poll drew 38 responses from economists and analysts in the five biggest Association of Southeast Asian Nations members, or ASEAN5, and India.
The 2016 growth forecasts for three of the five ASEAN countries -- Indonesia, Malaysia and Thailand -- were revised down from the previous survey in March. The 2016 forecast for the ASEAN5 remained unchanged at 4.3%, using a weighted average calculated from the five countries' figures. However, the ASEAN5 forecast for 2017 was cut by 0.1 of a point to 4.6%, while that for 2018 was reduced by 0.2 of a point to 4.9%.
The influence of Brexit was not fully reflected in the figures, as some respondents said they had yet to estimate its potential effects on certain areas of the economy. Some economists said they would downgrade their forecasts shortly.
Many respondents said they see the Brexit result as a risk. When they were asked to name the three biggest economic risks over the next 12 months, "financial turmoil triggered by an unanticipated event" was the most popular answer in Malaysia, the Philippines, Singapore and India.
Other market-related risks, such as a fall in commodity prices and capital outflows, were also on many economists' minds. Three months earlier, respondents in most countries saw fading reform prospects, China's economic slowdown and market-related risks as the three main worries.
This time, China's decelerating economy was still seen as an important risk, but it drew less attention than market turmoil.
In their comments, many economists said that uncertainty would increase after the Brexit vote. They also said the impact would hit the financial markets first, before affecting the real economy through trade and investment. "The medium-term impact will be downside risk to economic growth," said Dendi Ramdani, head of industry and regional research department at Bank Mandiri of Indonesia.
Some expressed concern about Brexit having a negative impact on ASEAN integration and hindering efforts to nurture an open global economic system. "If even these [EU] countries with a long history of integration are not favorable to open economies, how can you expect ASEAN countries to look for regional integration?" said Dr. Yose Rizal Damuri, head of the department of economics at the Centre for Strategic and International Studies, Indonesia.
Still, even with the Brexit headwinds, the region's economies are generally expected to remain on track. The forecasts for ASEAN5 rise from 4.3% to 4.9% between 2016 and 2018, with India projected to grow around 8% in the 2016/17 fiscal year and beyond.
Expectations for growth in the Philippines, where new President Rodrigo Duterte took office at the end of June, are higher than those for the other four ASEAN countries. The country is expected to maintain a growth rate of more than 6% through 2018. Survey respondents said infrastructure development is a priority for the new government there.
Details of the survey can be found at JCER's website:
List of survey respondents:
Indonesia: Juniman, chief economist, Maybank Indonesia; Dendi Ramdani, department head of industry and regional research, Bank Mandiri; Umar Juoro, chairman, Center for Information and Development Studies; Yose Rizal Damuri, head of department of economics, Centre for Strategic and International Studies Malaysia: Suhaimi Ilias, group chief economist, Maybank Investment Bank; Lim Chee Sing, group chief economist, RHB Research Institute; Wan Suhaimie Saidie, head of economic research, Kenanga IB; Patricia Oh Swee Ling, senior economist, AmInvestment Philippines: Alvin Ang, professor, Ateneo de Manila University; Jonathan L. Ravelas, FVP chief market strategist, BDO Unibank; Ildemarc C. Bautista, head of research, Metropolitan Bank & Trust; Jojo Gonzales, head of research, Philippine Equity Partners Singapore: Manu Bhaskaran, CEO, Centennial Asia Advisors; Randolph Tan, associate professor, SIM University; Hayato Nakamura, senior economist, Bank of Tokyo-Mitsubishi UFJ Thailand: Phacharaphot Nuntramas, head of economic and financial market research, Siam Commercial Bank Economic Intelligence Center; Siwat Luangsomboon, head of research group, Kasikornbank; Thammarat Kittisiripat, senior economist, KT Zmico Securities India: Kentaro Konishi, president and CEO, Daiwa Capital Markets; Dharmakirti Joshi, chief economist, Crisil; Sonal Varma, chief India economist, Nomura India For multiple countries: Euben Paracuelles, senior economist, Nomura Singapore; David Fernandez, head of FICC research, Asia-Pacific, Barclays