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Finance & Development
A quarterly magazine of the IMF		 June 2006, Volume 43, Number 2


Country Focus

ASEAN-4

The near-term growth outlook for the ASEAN-4 (Indonesia, Malaysia, Philippines, and Thailand) is favorable, thanks to strong export growth. But sustaining medium-term growth requires reviving domestic demand, especially investment.

Export growth, though slowing, is underpinning continued GDP growth in 2006.But rising oil prices have pushed up inflation, calling for vigilance in monetary policy.High oil prices have trimmed current account surpluses-except Malaysia, a net oil importer.......while most foreign exchange rates have remained flexible.Reserve buildup has continued, although in Malaysia it temporarily reversed in late 2005 when expectations of a large revaluation waned.To sustain growth, investment will need to be stimulated by strengthening financial systems and improving the business climate.

Sources: IMF, World Economic Outlook database; CEIC Data Company LTD; and IMF staff calculations.