The renewed focus on intra-Asean trade and resilient domestic demand could help buffer the region, including Malaysia, from the impact of rising global economic uncertainties, says Affin Bank group chief economist Alan Tan.
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00:00How would the situation happening between US and China impact ASEAN?
00:05When we listened to the Prime Ministers yesterday and the Ministers talking about ASEAN,
00:12we know the focus is on intra-ASEAN trade because there are opportunities in many areas.
00:20Of course, when we look at the domestic demand of ASEAN, it remains healthy as well.
00:27In countries like Malaysia, we are benefitting from rising tourism activities
00:33and therefore that basically forms a component of Malaysia's domestic demand.
00:39Similarly, we are seeing ASEAN region as a whole cooperating,
00:44coming up with possible steps to negotiate with the US on the tariff deals.
00:55And that, I think, we are already seeing quite evident yesterday where countries like Japan and some other countries are opening to negotiation.
01:07And that, I think, ASEAN as a region would also take the same stance where instead of retaliating, countries in the regions will be negotiating with the US.
01:21And therefore, hopefully, some positive outcome from the negotiation and the tariff that has been imposed on Malaysia possibly could be reduced as well.
01:35But nevertheless, I think, looking at the current scenario where there are talks about China being imposed 104 tariff rates effective from today,
01:51And that, I think, that I think, where we will continue to see some countries in the region a possibility of benefiting where some of the goods may be exported from the other ASEAN countries and not from China,
02:10that would maybe escape that would maybe escape that 104 tariff.
02:15But having said all that, I think, right now, the situation still remains uncertain.
02:20And therefore, the expectation here is that tariff does not really cause recession, but the uncertainty surrounding the tariff cause recession in the US and also possibly in the global scenario.
02:40But nevertheless, having said all this, I think, we are still optimistic that Malaysia will escape recession, partly because Malaysia has a very strong fundamentals in terms of domestic demand.
02:56And because of that, exports with the diversified markets, we will see a slowdown, but not a recession this year.