Asean+3 prospects seen as bright despite risks
Finance Minister Kittiratt Na-Ranong and the central bank governors of Asean countries are still optimistic about the continued growth of the Asean+3 economy this year despite the risks posed by China's economy, loan expansion, asset bubbles and capital
Kittiratt, who is also a deputy prime minister and the leader of the representatives from Thailand, together with Bank of Thailand Governor Prasarn Trairatvorakul joined the 16th Asean+3 Finance Ministers and Central Bank Governors’ Meeting last Friday in Delhi.
The meeting, which was held before the 46th Asian Development Bank Annual Meeting, was chaired by Rahman Ibrahim, second finance minister of Brunei, and Zhu Guangyao, deputy finance minister of China.
Asean+3 comprises the 10-nation Southeast Asian bloc plus China, Japan and South Korea.
The expansion of the regional economy is being driven by domestic demand, strong financial institutions and monetary systems, and appropriate macroeconomic policies.
The risk factors include the expansion of China’s economy, high liquidity in the world driven by the relaxation of financial policies by many developed markets, rapid expansion of credit, asset bubbles and the fluctuation of capital flows, which may upset financial stability in the region.
At the meeting, the members focused on the application of macroeconomic policies that are appropriate to the economic situation and economic and financial cooperation at the regional level to maintain growth and economic stability.
Major topics were the progress in the change being made to an agreement to increase efficiency in providing financial assistance among Asean+3 members and the development of the Chiang Mai Initiative Multilateralisation measure. The move is aimed at reducing dependency on the International Monetary Fund (IMF). It would also promote the Asean+3 Macroeconomic Research Office (AMRO) as an international organisation with the same status and privileges as other international organisations, such as IMF and ADB.
AMRO will be the first international financial organisation to be set up by Asean+3, which will support the AMRO’s role in analysing and warning of economic threats in the region.
