Malaysia, Thailand see strong growth in Q3

SINGAPORE : Regional economic performance has been mixed in the third quarter this year as Asian economies weather the fall in global export demand to varying degrees of success.

Malaysia and Thailand recently released better-than-expected GDP growth figures, buoyed by investment and consumption growth.

Year-on-year, Thailand's economy grew three per cent in the third quarter, while Malaysia recorded a 5.2 per cent growth.

Some analysts said this could be due to decoupling between domestic demand and weak exports globally.

Mr Daniel Wilson, an economist with ANZ Research, said: "This is true in Malaysia, it's true in Indonesia right now, we also see it in Thailand, so it's generally a Southeast Asia story. And when you compare that to the NIEs, the growth picture there is much weaker right now, compared to the domestically-driven ASEAN economies."

The NIEs, or newly industrialised economies of Asia, have reported tepid Q3 GDP growth.

Singapore's growth was flat on-year, while South Korea reported a 1.6 per cent growth. Taiwan and Hong Kong grew about 1 per cent.

These trade-dependent economies have found it difficult to stimulate growth by boosting domestic consumption.

Mr Song Seng Wun, Regional Economist at CIMB, said: "For a smaller city-state like Singapore, there's very little one can do. With a population of five plus million people, we can only do so much to support consumption without it spilling over to property prices, and putting inflation worries at the forefront."

With the G3 economies of the United States, Europe and Japan either in recession or showing weak growth, economists said there is greater urgency for regional economic cooperation.

"From the developing countries or here in Asia, there's certainly a lot of self interest that we might not get much contribution or any additional growth from developed economies, perhaps we can all work closer together, improve trade linkages, investment linkages, to enhance our opportunities for growth here," said Mr Song.

And that's likely to be a key focus for world leaders at the ongoing East Asia Summit in Phnom Penh, Cambodia.