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Published on March 11, 2008

In a report, titled "Asean - 4 Economies Show Strong Growth Despite Sinking US Demand", it said Thailand, Indonesia, Malaysia and the Philippines should weather the challenges better than most countries.

Supporting the view is the robust export increase in intra-Asia region last year, which offset a drop in exports to the US.

 "Relatively lower inflation and interest rates in the past two years, combined with increased incomes due to favourable terms of trade and healthy remittance inflows, have boosted domestic consumption and investment" said Standard & Poor's Asia Pacific chief economist Subir Gokarn.

Expansionary fiscal policies will enhance this momentum in 2008-2009.

The central banks' stance will shift between neutral and easing depending on how rapidly the region arrests its domestic food shortage problems.

As currencies are expected to appreciate further this year, though not as sharply as last year, its main objective should be to protect price stability.

"Major risks to growth include a severe recession in the US or a more severe fall out of the financial crisis. Uncertainty with respect to oil prices and food supply shortages will threaten inflation and could likely hit private spending and investment, and therefore economic growth," Gokarn noted.

Against negative factors, Thailand is boosting the economy with stimulus measures.

The Nation