HONG KONG The growth outlook for ASEAN economies is likely to be mixed in the next two years, with domestically focused economies such as Indonesia and the Philippines on relatively better footing than their more trade-reliant neighbors, Moody's Investor Service said on Tuesday.
The cautious view from the ratings agency is a warning sign for global policymakers who are relying on emerging economies, particularly in Asia, to drive global growth in the coming years.
With a prolonged slump in global trade showing no signs of abating, the outlook is darker for Asia's export-oriented economies, Moody's said.
"The growth prospects of ASEAN's major export-orientated economies -- Singapore, Malaysia and Thailand --will remain weaker than those of more domestic demand-driven economies, Indonesia and the Philippines, in 2016 and 2017," said Rahul Ghosh, a senior research analyst at the ratings agency.
Total trade -- the sum of exports and imports -- is the highest for Singapore, Malaysia and Thailand, making them more vulnerable to slowdowns via both the export channel and weaker investment, the ratings agency said.
Those three economies also face high levels of household debt.
Asian central banks have leaned towards an easing bias this year faced with slowing growth.
Last week, Indonesia's central bank on Thursday cut its benchmark interest rate by 25 basis points to 6.75 percent, its third straight reduction of that size this year.
(Reporting by Saikat Chatterjee; Editing by Kim Coghill)
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