Southeast Asia Capital Confidence Barometer April – October 2013

Economic outlook

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Market sentiments up in Southeast Asia

The survey shows a significant improvement in corporate confidence among Southeast Asia respondents both about the global economy as well as their respective local economies, this sentiment is expressed across all markets in the region.

What is your perspective on the state of the global economy today?

86%   of SEA respondents believe that the global economy is either expected to be stable or will improve over the coming year, up from just 46% who expressed the same six months ago.

What is your perspective on the state of the local economy today?

90%   of SEA respondents indicate that their respective local economies are either stable or improving, compared to 78% six months ago.

There is much reason to be optimistic, with most markets in the region maintaining steady growth and providing good prospects for investment.

Sentiment across several key indicators such as employment growth, corporate earnings and credit availability have shown significant improvement from six months ago both globally as well as locally in the region.

Confidence in Southeast Asia is driven by a number of factors including increased certainty around growth in China, steady monetary and economic policies in the main markets in ASEAN, the opening up of frontier markets such as Myanmar and improved capital markets across the world.

Economic growth predictions for SEA

While many analysts have predicted Southeast Asia to grow above 5% over the next 12 months, Southeast Asia respondents are more cautious regarding growth predictions for their own local economies. This is largely influenced by the low growth predictions for the different countries.

28%   of SEA respondents believe that their own local economies will grow between 3% to 5%, while just 5% believe that the region will grow over 5%.

The following sets out Southeast Asia respondents predictions for economic growth in their respective local markets:

  • Singapore: 59% of Singapore based respondents predict that local economy will grow between 1% and 3%, a sentiment consistent with government expectations.
  • Vietnam: 67% of Vietnam respondents expect local economy to grow between 1% to 3%, reflecting cautious business confidence in that market.
  • Indonesia: 60% of Indonesia respondents expect local economy to grow by more than 3%.
  • Malaysia: 33% of Malaysia respondents expect local economy will grow by more than 3%.
  • Thailand: 50% of Thailand respondents expect growth in Thailand to exceed 3%.
  • Philippines: 20% of Philippines respondents expect the Philippines to grow by over 3%.