ASEAN+3 Macroeconomic Research Office

Global #FDI patterns are changing and warrant close attention given its critical role in driving economic growth and development. This paper analyzes the reconfiguration of FDI in #ASEANplus3 from both immediate- and ultimate-investor perspectives. Findings show that the region has emerged as a leading destination for FDI, outperforming other regions in its ability to continue attracting long-term business financing. ▶️ Read: bit.ly/3AcbYBV

At the #IMFmeetings, AMRO Director Kouqing Li, Deputy Director Tetsuya Utamura, and Chief Economist Hoe Ee Khor met up with IMF Deputy Managing Director (DMD) Bo Li. AMRO Director expressed his appreciation for the IMF's continued support to AMRO and updated DMD Li on the developments in AMRO and ASEAN+3 Regional Financing Arrangements. Both sides reaffirmed their commitment to strengthen cooperation in safeguarding the economic and financial stability of the #ASEANplus3 region.

AMRO Chief Economist Hoe Ee Khor discussed how the #ASEANplus3 region is embracing transformation in a reconfigured world at the Washington D.C. Economic Festival organized by Reinventing Bretton Woods Committee. Dr Khor joined the discussion on ‘Global Trade Transformation and Geo-Economic Fragmentation’ alongside distinguished speakers, including ESM Chief Economist Rolf Strauch, European Investment Bank Chief Economist Debora Revoltella, Professor Laura Alfaro, and WTO Chief Economist Ralph Ossa. The event took place on the sidelines of the #IMFmeetings.

Our latest working paper introduces high-frequency country specific financial stress indices (FSIs) for selected #ASEANplus3 economies, which are valuable tools for macro-financial surveillance. These FSIs are used to identify financial sector risk regimes in each economy and assess their potential as early warning indicators. The advance notice is valuable to policymakers and market participants alike. Policymakers could employ this information to proactively tighten payout policies, strengthen bank capital adequacy, and prepare emergency liquidity facilities. Market participants may benefit from such warnings by implementing defensive hedging and loss mitigation strategies and adjusting their positions accordingly. Read: bit.ly/3UoAKFM

The 9th High-level Regional Financing Arrangements #RFAs Dialogue was held in Washington DC, where representatives from the International Monetary Fund (IMF) and the RFAs - AMRO, Arab Monetary Fund, the BRICS Contingent Reserve Arrangement, Eurasian Fund for Stabilization and Development, European Commission, ESM - European Stability Mechanism, and FLAR | Fondo Latinoamericano de Reservas - reaffirmed the importance of having a strong Global Financial Safety Net, including effective collaboration among our institutions, to safeguard against external risks. Amid a complex geoeconomic environment and elevated policy uncertainty, IMF and RFAs reiterated our continued commitment to maintain an open and candid dialogue to share crisis experiences and expertise and support multilateralism. ▶️ Read the press release: https://lnkd.in/dfvMCZhd 📷 by ESM - European Stability Mechanism

Monitoring capital flows on a timely basis and assessing the vulnerability of financial markets are crucial, notably for #ASEANplus3 emerging market economies. This working paper constructs a timely, high-frequency database of non-resident portfolio flows for ASEAN+3 economies and uses the data to develop a framework for assessing risks of sudden outflows. ▶️ Read: bit.ly/48f3l5U

AMRO Lead Economist Kevin C. Cheng provides an update on the latest global and regional financial conditions and highlights key risks to the #ASEANplus3 region. Download the 2024 ASEAN+3 Financial Stability Report #AFSR full report to learn more: bit.ly/3NvrHz3

AMRO economists Anthony Tan and Vanne Khut use an import-adjusted GDP component approach to asses sources of economic growth in #ASEANplus3 by demand components. Results show that since the mid-2000s, domestic demand has gained a bigger share in regional aggregate demand. Progress in regional integration—particularly between ASEAN and the Plus-3 (China including Hong Kong, China; Japan; and Korea) economies—have provided the added impetus to growth while fostering closer cooperation between one another. ▶️ Read their paper: bit.ly/4dR9dDF

The growing financial interconnectedness of #ASEANplus3 economies heightens the risk of cross-border shocks. While these connections offer opportunities, they also increase the risk of financial contagion. When one economy faces a financial shock, the effects can rapidly spill over across borders. AMRO economists Ruperto Majuca and Kevin C. Cheng highlight the different forms of spillover risks for regional economies, emphasizing the importance of robust surveillance and regional cooperation to safeguard against vulnerabilities. ▶️Read their blog: bit.ly/489bZTA

AMRO's Annual Consultation Report on #Malaysia is now available for download! Malaysia's economic growth is projected to accelerate to 4.7% in 2024 and 4.9% in 2025, supported by strong domestic demand and export recovery amid the global technology upcycle. Inflation has moderated but is subject to upside risks from fuel subsidy rationalization. Restoring fiscal space, building up foreign reserves, and accelerating structural reforms will help foster further economic resilience and raise potential growth. ▶️ Read the press release: bit.ly/3Ugdwl1 ▶️ Download the report: bit.ly/4f5gVLB