MANILA -- Most economies in Southeast Asia are still chugging along, but the region's economic outlook is unclear and downside risks are multiplying.
The combined gross domestic product of the five largest economies in the region grew by 4.4% in the October-December quarter compared with the previous three months, according to the Asian Development Bank. The pace of growth accelerated by 0.2 point from the July-September quarter. The ADB estimates for Indonesia, Malaysia, the Philippines, Singapore and Thailand are based on government data.
It was the first quarter-to-quarter rise in combined GDP growth for the five countries in a year. Strong consumer spending, backed by fiscal and monetary stimulus, has kept many economies humming. But things look murkier down the road: China's slowdown and falling commodity prices are among the potential pitfalls.
By country, the Philippines grew a robust 6.3% in the quarter, beating market forecasts. Indonesia's economy also expanded at a brisk 5% pace. The two populous countries led the region's economic growth.
Incomes are rising in the Philippines, due in part to the growth of call centers and other outsourcing businesses. Consumer spending, which accounts for 70% of the country's GDP, has been firm. Lower oil prices are a boon to the Philippines, which imports energy. The government has forecast continued strong growth this year of around 7%.
Rising public spending is also giving a boost to the region's big economies. In Indonesia, public investment in the October-December quarter rose 7.3% as President Joko Widodo's ambitious infrastructure building program got rolling. Fixed capital formation, composed mostly of private-sector capital investment, climbed 6.9%, up from a 4.8% increase in the July-September quarter. Statistics Indonesia says the economy has a good chance of achieving the government's growth target of 5.3% in 2016.
Thailand's economy, powered mainly by manufacturing, was hurt by China's slump. The growth rate fell short of 3% for the third straight quarter. But the vital tourist industry performed well, and there are signs of an upturn in domestic demand. The government hopes to offset declining exports with domestic stimulus focused on rural areas, where 40% of Thais live. On Feb. 23, the government decided on a 93 billion baht ($2.6 billion) package to support farming villages.
Less populous Singapore and Malaysia have hit a rough patch. Singapore's export-dependent economy has taken a body blow from China's weaker growth. Its exports to the country in January plunged 25% from the same month a year earlier.
Malaysia is in a more serious predicament. Many economists predict tough times ahead for the country, which is heavily dependent on exports of commodities such as crude oil and palm oil.
Companies in the country's energy and resources sector have been battered by the collapse of oil prices. The sagging bottom lines of major state-run energy companies like Petronas mean less tax and dividend revenue for the government. That makes it harder to prop up consumer spending with fiscal stimulus.
For the full year, combined GDP for the five countries grew 4.3% for all of 2015, down 0.1 point from the previous year, according to the ADB.
But the Association of Southeast Asian Nations' market of 600 million consumers still has huge growth potential. Despite the global uncertainty, measures to shore up domestic demand may keep the regional economy ticking over nicely.