KUALA LUMPUR, Oct 12 (Bernama) — Asean economies are powering ahead and remain a bright spot despite severe global headwinds, Moody’s Analytics said today.

The credit risk management analyst said solid domestic demand had helped the region to expand at nearly trend pace despite the global downturn.

“Even though global conditions are expected to remain soft for the next several quarters, most of Asean will continue to grow near trend,” it said in its report on Asean outlook here today.

However, Asean’s investment drive has coincided with a decline in savings in Malaysia, Thailand and the Philippines.

Moody’s Analytics said this is consistent with rising domestic consumption and the deteriorating current account positions across the region.

“If the shift towards domestic consumption continues, export competitiveness could falter, as resources shift to domestic-facing industries. This would imply a long-term deterioration in the region’s current accounts, though admittedly most countries still show a healthy ledger,” it said.

It added that tighter global credit conditions would limit the availability of credit, further weighing on domestic demand.

However, policymakers in Asean are ready to loosen policy further should the global economy take a turn for the worse, it said.