Notwithstanding its resilient domestic demand, ASEAN is not immune from internal and external downside risks. Some major ASEAN- centric concerns include Malaysia's upcoming general elections, Indonesia's inflation, as well as Singapore's economic restructuring, which will continue to dampen growth prospects and increase labor costs in the city-state.
Should there be a severe U.S. fiscal shock, trade-dependent economies like Singapore, Malaysia and Thailand will be more vulnerable.
Other external factors, such as an escalation of the ongoing Euro-zone sovereign debt crisis, a flare up in Middle East tensions, and weaker-than-expected growth on the China macro front can also potentially derail the growth trajectory of ASEAN.
Cumquat market in S China's Guangxi
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