Southeast Asian economic growth is set to accelerate next year as domestic spending counters a slowdown in exports, the International Monetary Fund said.
Expansion in Indonesia, Thailand, Malaysia, the Philippines and Vietnam will climb to 5.6 percent in 2012 from 5.3 percent this year, with growth "pulled by domestic demand -- in particular, robust investment -- which will offset the slowdown in export momentum," the Washington-based lender said in its World Economic Outlook report released Tuesday.
Europe's debt crisis and elevated US unemployment have hurt demand for Asian exports, prompting Indonesia, Malaysia and the Philippines to leave interest rates unchanged in recent weeks as officials assess whether price pressures will moderate. Economic threats may warrant a "wait-and-see approach" for monetary policy in some Asian economies, the IMF said.
"The risks around the outlook point down, mainly due to the deterioration in the external environment," the IMF said in the report. The "support from accommodative policies" is "more than offset by a potentially larger drag from external demand, potential pressure on commodity prices, and persistent financial shocks from the euro area and the United States," it said.
The MSCI Asia Pacific Index of stocks has slumped about 15 percent this year, more than a slide of about 10 percent in the MSCI World (MXWO) Index, as slowing global growth curbs appetite for emerging-market investments.
The IMF also said price pressures vary across Asia, with the risks around inflation continuing to "point up" in Vietnam.
Further exchange-rate flexibility remains a key policy priority for emerging Asia, the lender said.
The IMF's 2011 and 2012 growth forecasts for the region made up of the five Southeast Asian economies are both 0.1 percentage point lower than its June predictions.