Medium-term economic outlook and assessment in Emerging Asia

The growth prospects of Emerging Asia (Southeast Asia, China and India) look favourable overall in the medium term. Growth in the ASEAN-5 countries (Indonesia, Malaysia, the Philippines, Thailand and Viet Nam) remains robust and the CL M countries (Cambodia, Lao PDR and Myanmar) are emerging as an engine of regional growth, while there will be slowing in China. The region also remains exposed to several other external risks (including those stemming from the normalisation of US monetary policy, economic reform in Japan and euro area uncertainty) and internal risks (including political uncertainty and instability in a few countries). While most countries are well positioned to manage these risks, further efforts will be needed to improve the conditions for growth. Fiscal balances are, in general, not expected to change significantly but fiscal reforms still need to be strengthened further. Deeper regional integration in implementing the ASEAN Economic Community by 2015 is also critical for Southeast Asia.