Bullish Asean growth; Thai PM, central bank lock horns again

This week in Asean: 

• Malaysia: Rosy manufacturing outlook 
• Indonesia: New Singapore-inspired oasis 
• Philippines: Bongbong Marcos visits White House 

Dear BT reader,

Summer storms are sweeping South-east Asia, but it’s not all dark clouds here. Figurative blue skies lie ahead, with recent outlook reports crowning Asean as the growth engine for the broader Asia-Pacific region. 

This week, both the Asian Development Bank and the Asean+3 Macroeconomic Research Office released flagship reports that forecast robust growth for South-east Asia across this and next year on firm domestic demand. More good news: inflation is expected to ease in most Asean economies and head towards central bank targets.  

On this note, I kept a close eye on the monetary policy meetings in the Philippines and Thailand earlier in the week. To no one’s surprise, Bangko Sentral ng Pilipinas kept its benchmark interest rate steady at a 17-year high on stubborn inflation. More intriguingly, the Bank of Thailand maintained its decade-high rate again, standing firm against the tide of Prime Minister Srettha Thavisin and his ceaseless calls for cuts.

Meanwhile, rate cuts are broadly expected to sweep the region only in June to the tune of the Fed’s own easing as interest rate differentials keep Asean economies on the alert. 

Also potentially on the chopping block are the heads of business and political elites in Malaysia, as Prime Minister Anwar Ibrahim charges along with his anti-graft crusade. He calls it a crackdown on corruption; critics call it a witch hunt – pick your poison. Take three minutes of your time to read our Malaysia correspondent Tan Ai Leng’s list of seven big names who are currently being investigated or charged – think Mahathir’s children and Malaysia’s Casio King. 

More corruption headlines: Vietnamese real estate tycoon Truong My Lan, 67, was sentenced to death on Thursday (April 11) for embezzling funds from Saigon Commercial Bank. For a quick refresher, you can read our Vietnam correspondent Jamille Tran’s three-minute piece on what you need to know about the case. This week, Jamille also looks at how Ho Chi Minh City, Hanoi and Da Nang are leading Vietnam’s innovation race. 

Speaking of racing, there could be a new Formula 1 circuit in Indonesia in the distant future. A multibillion-dollar green tourism destination, Tropical Coastland, is on the country’s list of 14 national projects, touting facilities like a 27-hole golf course, a safari park and theme parks upon its completion by 2060. Our Indonesia correspondent Elisa Valenta interviewed Richard Kusuma, the chief executive officer of conglomerate Agung Sedayu Group, which is behind the project that he says drew inspiration from Singapore’s Sentosa. 

Do feel free to send me any feedback you might have on our newsletter. Have a good weekend.

Trending

What I’m watching: The Indonesian rupiah, briefly Asia’s best-performing currency in 2023, plunged further this week as it breached the key 16,000 level against the US dollar on Thursday (April 11), according to Bloomberg data.

Why you should care: The rupiah had fallen to a four-year low against the USD last week but remained just below the 16,000 mark. Bank Indonesia is likely to hold off on slashing its benchmark BI-Rate at its upcoming April 24 policy meeting, but some economists say a rate hike is not out of the question if the currency remains persistently weak.

Asean in Brief

• Singapore, Germany to work towards upgrading relations to a Strategic Partnership Singapore and Germany have agreed to work towards upgrading relations to a Strategic Partnership in recognition of the “growing depth and breadth” of bilateral ties. Read more
• Malaysia’s industrial production beats expectation with 3.1% growth in February The growth, although lower than 4.3 per cent seen in January, exceeded the 1.5 per cent growth forecast by a group of economists in a recent Reuters poll. Read more
• Thailand leads push for 6-nation visa to lure moneyed tourists Thailand is steering an initiative for a joint-visa programme with countries that together hosted about 70 million tourists last year as Prime Minister Srettha Thavisin ramps up initiatives to attract more long-haul and high-spending travellers. Read more 
• Thailand to fund US$14 billion cash handout through state budget Thailand will fund a US$14 billion cash handout programme to stimulate the economy through a combination of state budget and assistance from a state bank, shelving an earlier plan to resort to off-the-book borrowing. Read more
• Vietnam orders Netflix to stop advertising, distributing its games The US streaming platform has not yet been granted a licence for games services, its broadcasting authority said on April 11. Read more
• Malaysian tycoon Vincent Tan is considering a Berjaya Food buyout Malaysian tycoon Vincent Tan is considering taking Kuala Lumpur-listed Berjaya Food private, according to people with knowledge of the matter. Read more
• Vietnam aims to start work on high-speed rail lines to China by 2030 One of the planned lines would run from Vietnam’s port cities of Haiphong and Quang Ninh through Hanoi to Lao Cai province, which borders China’s Yunnan province. Read more
• Nvidia, Indosat plan US$200 million AI centre investment in Indonesia, government says Nvidia and Indonesia’s telco firm PT Indosat Ooredoo Hutchison plan to build an artificial intelligence centre in Central Java in 2024, worth US$200 million, the communication minister said. Read more
• Cambodian PM says country to build US$1.7 billion canal Cambodia will push forward with controversial plans to build a US$1.7 billion canal linking capital Phnom Penh to the sea, Prime Minister Hun Manet said on April 11. Read more