Figure 22: GDP growth rate in ASEAN member economic in constant prices, 1998–2013* (y-o-y, in %)
ASEAN economies continue to show slower economic growth until the end of the year amidst persisting global economic uncertainty


Source: IMF, CEIC (2013)
*= quarter III-2013

As the year 2013, comes to an end, economic growth of Association of South East Asian Nations (ASEAN) member nations show lower than expected.  Economic growth of key economies in the region has yet to show remarkable stability or overall economic growth.  Indonesia, the Philippines and Thailand are the key countries in the region which registered lower economic growth in quarter III-2013 than in quarter II-2013 (y-o-y). In the meantime, Malaysia, Singapore and Viet Nam are the key countries in the region which succeeded in achieving higher economic growth in quarter III-2013 than in the previous quarter.. Countries that registered significantly lower economic growth in quarter III-2013 than in the quarter II-2013 included Thailand (2.2% to 1.3%), followed by the Philippines (7.5% to 7.0%) and Indonesia (5.8% to 5.6%). In the meantime, key countries in the region that registered improvement in economic growth in terms of quarters were Singapore (3.8% to 5.1%), Malaysia (4.4% to 5.0%) and Viet Nam (5.0% to 5.5%).

In quarter III-2013, Philippines registered the highest economic growth in the region. Nonetheless, the economy of the Philippines is likely to suffer from the after effects of the Haiyan typhoon disaster (Yolanda in local language) which caused severe destruction and damage in several major provinces in the country, hence will have indirect impact on the economy, the implementation of good policies by the Philippines   government means that economy continue to show positive growth in quarter III-2013. This is largely attributable to the fact that, the economy of the Philippines, does not rely heavily on export-import activities. Philippines is one of the few economies in ASEAN region that registered economic growth, which is attributable to high national investment and  government expenditure , which is stark contrast with other economies that rely on export-import activities. Consequently, persistence of a weak global economy and attendant uncertainty means that economies of such countries cannot avoid such effects both directly and otherwise. ,

Figure  23: Inflation rates in ASEAN Member Nations, 2000-2013*  (y-o-y, in %)
Inflationary pressure shows an upward trend


Source: Bloomberg (2013)
*= October 2013

Inflation level in ASEAN member nations is a major factor that has hampered economic growth and improvement in the welfare in the region from attaining its optimum potential.  In October 2013, Indonesia registered the highest inflation (8.32%), which puts it in same league as peripheral countries such as in ASEAN region such as Laos (6.87%) and Viet Nam (5.87%). Inflation as one of the indicators of creation of welfare in a given country shows that in contrast with countries in the region which have to large extent been able to maintain inflation of below 3%, Indonesia, Laos and Viet Nam have not followed suit in reducing inflationary spiral in their economies. To make matters worse, Indonesia faces the prospect of an even high inflation level considering the fact that prices of goods in general will experience an increase as the year comes to a close. Inflationary pressure is largely due to the fact that realized economic growth rate continues to fall short of optimal capacity. Doubtless, inflationary pressure will have adverse effect on preparations of ASEAN member nations to welcome the coming into force of ASEAN Economic Community in 2015.

Table 8: Share Indices of ASEAN Countries, 2009- 2013* (y-o-y, in %)
Developments in Capital Markets show an improvement but at slower pace than desired

Source: Bloomberg (2013)

Table 9: Exchange rates of ASEAN Country currencies against the USD, 2009- 2013*  (y-o-y, in  %)
Exchange rates of  ASEAN countries curriencies continue to weaken

Source: Bloomberg (2013)

Weakening performance of capital markets and money markets which was evident in quarter II-2013, remains unabated in quarter in quarter III-2013. In general capital markets in some key economies in the region have shown signs of improvement, which indirectly signals improvement in investor confidence in the performance of economies of ASEAN member countries.  However, during quarter  III-2013, the pace of improvement in the capital market was slower than expected. That may indirectly imply that not all investors are convinced about better prospects of ASEAN member economies. Apparently, improvement in the performance of capital markets has not spilled over into money markets, a fact that is attested by significant depreciation of nearly all currencies in the region.  The depreciation of exchange rates in ASEAN region, especially Indonesia (-22.19%) and a Myanmar (-14.60%) which are the two countries that have experienced depreciation of exchange rates of their currencies above 10% compared with the exchange rates of their currencies at the beginning of the year 2013.