IMF’s economic outlook for Asean-5 a fair reflection, says M&A advisor

There is a positive angle to note with the downwards revision for Emerging Asia, M&A advisor Paran Puvanesan.

KUALA LUMPUR, July 30 – The International Monetary Fund (IMF)’s recent revision, where it has marked down prospects for emerging market and developing economies in 2021, is a fair reflection of the state of the economies of Emerging Asia including Malaysia, that is currently being felt on the ground, says Mergers and Acquisition (M&A) advisor Paran Puvanesan.

The International Monetary Fund (IMF) has revised downwards the 2021 economic outlook for Asean-5 countries by 0.6 per cent to 4.3 per cent, citing the reduced activities following the Covid-19 pandemic as a factor. By contrast, the forecast for advanced economies was revised upwards taking in view the pandemic developments there including access to vaccines and changes in policy support.

The Asean-5 countries are Indonesia, Malaysia, the Philippines, Thailand, and Vietnam.

“However there is a positive angle to note,” said Paran, a Partner at AKINA Deals Advisory.

“The growth forecast of advanced economies, the traditional buyer of goods and services from Emerging Asia, augurs well for the longer term outlook of this region. There will be time lag for this to have a growth impact to these economies.

“Nevertheless appropriate policies and support must be in place now to ensure companies are able to sustain themselves in this pandemic situation in order to be ready to capitalise on pent up demand and the upward swing in near future,” said Paran, who is a Chartered Accountant.

“The capital markets and mergers and acquisitions (M&A) trends in Emerging Asia are certainly anticipating this pent up demand to shape the economies in the near future,” he added.

In its latest World Economic Outlook (WEO) report released on Tuesday, the IMF revised downwards forecast for the overall emerging market and developing economies by 0.4 per cent to 6.3 per cent in 2021, largely because of growth markdowns for emerging Asian economies.,

It, however, revised upwards the Asean-5 countries’ economic outlook for 2022 by 0.2 per cent to 6.3 per cent.

The IMF also maintained its six per cent global economic growth forecast for 2021 and upgraded its 2022 growth projection by 0.5 per cent to 4.9 per cent.

Growth forecast for the US, UK and Europe were raised upwards, with the rate of vaccination and fiscal support cited as contributing factors.