KUALA LUMPUR (Oct 15): Standard Chartered plc (StanChart) said on Friday (Oct 15) Malaysia is showing good signs of economic recovery, helped by the country's National Recovery Plan (NRP) which has been tasked to rejuvenate the local economy from the impact of Covid-19-driven movement restrictions under the various forms of the Movement Control Order (MCO) to curb the spread of the pandemic.
According to StanChart's Asia chief executive officer Benjamin Hung, the crucial aspects of Malaysia's economic growth are seen in the electronic, electric vehicle component, pharmaceutical and Islamic bond or sukuk markets.
Hung was speaking at a virtual media briefing on emerging business opportunities within the Association of Southeast Asian Nations (ASEAN) region.
Besides Malaysia, ASEAN members include Brunei, Cambodia, Indonesia, Laos, Myanmar, the Philippines, Singapore, Thailand and Vietnam, according to ASEAN's website.
At the media briefing, Hung said foreign direct investment (FDI) flow into ASEAN has gone up to about 14% of global FDI from around 12%, showing bright prospects for the region.
He said FDI flow is on the rise within ASEAN despite its near-term Covid-19 challenges, due to diversification of supply chain and rising consumption in the region, driven by the middle-class population.
"If you think about ASEAN as a bloc, China definitely is very keen to develop a closer set of ties (with ASEAN countries), given its intimate supply chain relationships with the region. The US is also very keen to develop ASEAN as an alternative, in terms of diversification in the supply chain.
"Likewise, European markets are also seeing ASEAN for that matter," he said.
Hung said that among ASEAN countries, Indonesia, Malaysia, the Philippines, Thailand and Vietnam have more than 50% of their gross domestic product (GDP) driven by household consumption.
According to him, the focus of FDI in the region is likely to involve the establishment of manufacturing operations particularly in the electronic, automotive and technology segments.
For 2021, Hung said the ASEAN bloc should be capable of achieving 6% GDP growth, compared with the global GDP growth forecast of about 3%.
"ASEAN (economic) growth will probably be showing a little bit of (a) challenging second quarter and third quarter (due to pandemic-led lockdowns), but for the full year (2021), it will still be a good technical rebound for (a) high single digit (GDP expansion)," he said.