ASEAN ECONOMIC BULLETIN - August 2015

Get the latest updates on the ASEAN region and updates on UK Prime Minister's visit to the region. This edition also includes a special focus on the impact of economic developments in China.

BY UK FOREIGN COMMONWEALTH OFFICE

 

 

Highlights

 

The slowdown in the Chinese economy, ASEAN‟s largest trading partner, has dampened economic growth in the region. The devaluation of the renminbi in August has added to concerns about China‟s slowdown, as well as put further downward pressure on already weakening SE Asian currencies.

 

Economic growth in most major SE Asian economies has slowed as the result of global and domestic headwinds. The notable exception is Vietnam, where growth is accelerating due to the strong, export-orientated, manufacturing sector and healthy domestic consumption. Growth in the Philippines also strengthened in the second quarter of 2015 but remains below the level experienced in recent years.

 

The fatal bomb blast in Bangkok on 17 August could, in addition to the horrific human toll, further weaken the struggling Thai economy. The important tourism sector had been one of the brighter spots in an otherwise downbeat outlook.

 

Negotiations on the EU-Vietnam Free Trade Agreement were provisionally concluded in August, potentially leading to an estimated £20 million annual boost for UK exports to Vietnam, although implementation will take a while.

 

ASEAN Economic Ministers met in Kuala Lumpur on 22-25 August. They announced that 91.5% of the ASEAN Economic Community (AEC) Blueprint had been completed, ahead of the end-2015 deadline. They also held discussions with Dialogue Partners and the third ministerial meeting of the Regional Comprehensive Economic Partnership (RCEP). 

 

The Indonesian government has increased import tariffs for over 1,000 products, with the new rates for liquors (150%) and automobiles (50%) among the highest.

 

Prime Minister David Cameron visited Indonesia, Singapore, Vietnam and Malaysia in late July to promote stronger trade links with this dynamic region and encourage further investment in the UK, especially the Northern Powerhouse. He became the first British Prime Minister to visit the ASEAN Secretariat and announced the UK would provide technical support to the AEC. 

 

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