Growth accelerates as ASEAN gears up for economic integration: report

KUALA LUMPUR -- Growth in the Association of Southeast Asian Nations (ASEAN) will accelerate next year, keeping it above the global average, according to a report Friday on economic integration in the 10-nation bloc.

Global economic growth was projected at 3.3 percent this year, slightly down from last year's 3.4 percent, while ASEAN was expected to sustain last year's growth of 4.6 percent before accelerating to 4.9 percent in 2016, said the ASEAN Integration Report (AIR).

Regional economic integration would continue to contribute to economic resilience and growth performance, said the AIR.

"Looking to 2015 and beyond, the macroeconomic landscape of ASEAN will continue to transform to weather challenging global economic conditions," it said.

"Continued efforts to implement economic integration initiatives embodied in the AEC (ASEAN Economic Community) will have a significant, positive influence on trade and FDI (foreign direct investment), promoting overall economic growth in the region as well as stimulating structural transformation across ASEAN economies."

The overall structure of ASEAN economies has changed since the adoption of the AEC Blueprint in 2007 with the growing importance of the services sector.

The share of the services sector in the economy steadily rose to 50.2 percent in 2014, while the industry and the agriculture sectors' share declined to 38 percent and 11 percent respectively.

Growth has been driven by an increasing share of FDI inflows to the services sector, as well as a solid performance in the trade sector, contributing to the region's output expansion.

The share of intra-regional trade in ASEAN's total trade has been relatively steady at around a quarter of the total.

Last year, intra-regional trade was 58.9 percent up from 2007, marginally above the growth in extra-regional trade 51.7 percent.

ASEAN was one of the key destinations for FDI, which reached $136.2 billion in 2014.

Intra-ASEAN FDI stood at 17.9 percent of the total in 2014 compared with just 11.3 percent in 2007.

The AIR provided a comprehensive analysis of the progress and impacts of the measures undertaken by ASEAN towards the establishment of the AEC, ASEAN Secretary-General Le Luong Minh said in a foreword to the report.

"Looking forward to the implementation of AEC agenda in the next ten years, the ASEAN Integration Report, which will be published periodically, would form part of an enhanced monitoring framework to contribute to more informed policy and decision making process," he said.