MANILA, Philippines – The upcoming regional integration is expected to provide a boost to the Association of Southeast Asian Nations’ (ASEAN) member economies, an official from the International Monetary Fund said yesterday.
“What the regional integration will bring is it is going to help increase the productivity in the region,” Romain Duval, division chief for regional studies at the IMF’s Asia department, said in a forum held in Makati City.
“But there will be more volatility in terms of growth because there is more propagation of shocks,” he continued.
The IMF, in its latest Regional Economic Outlook for Asia and the Pacific, has forecast the economic growth in the ASEAN region to slow down to five percent this year from the 5.1-percent expansion achieved in 2013.
Growth in the region is foreseen to further accelerate to 5.3 percent next year, the IMF has said.
The 10 member states of the ASEAN since 2007 have been preparing for the launch of its integrated economic community next year. The region’s goal is to create a highly-competitive single market that would boast of an equitable economic development.
Duval recounted that since the economies would be more integrated, for example, in the trade side, a shock occurring in one of the countries may easily spill over to the others.
“With this in mind, there should be more regional financial safety nets… and also for countries to join global financial safety nets,” he said.
Economies in the region should continue sustaining strong macroeconomic fundamentals, maintain healthy external payments position, and keep relatively high level of international reserves as added buffers to financial shocks, Duval further added.
The ASEAN already has put in place facilities meant to assist member countries facing liquidity shocks such as the $2-billion ASEAN Swap Arrangements and the $240-billion Chiang Mai Initiative Multilateralization Fund.
Aside from those, the 10-member bloc has also established the ASEAN Integration Monitoring Office which keeps track of the regional economic integration efforts and the ASEAN+3 Macroeconomic and Research Office which is the surveillance unit of the CMIM. –Kathleen A. Martin (The Philippine Star)
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