SE Asia set to match pre-GFC growth

By Colin Brinsden,
Economics Correspondent

CANBERRA, Nov 18, 2012 (AAP) - Australia's South-East Asian trading partners look set to grow at a robust rate over the next five years, matching the pace before the 2008/09 global financial crisis.

Such growth projections will come despite some slowing in the Asian region's giants, China and India, the Organisation for Economic Co-operation and Development (OECD) said in a new report released on Sunday.

The 10 countries of the Association of South-East Asian Nations (ASEAN) are expected to average an annual rate of 5.5 per cent growth over the 2013/17 period, the OECD said.

This will be faster than the 4.6 per cent in 2011 while matching its 2000/07 expansion.

"Domestic demand growth, and particularly private consumption and investment, will be the main drivers of growth in most ASEAN countries," OECD deputy secretary-general Rintaro Tamaki said at the report's launch in Phnom Penh.

Mr Tamaki said growth would be less reliant on exports than in the past, while the expansion of the middle class was likely to boost domestic demand.

Catering to Asia's growing middle class is seen as a major opportunity for Australia as indicated in the federal government's Asian Century white paper, released this month.

The OECD South-East Asian Economic Outlook 2013 said the impact of global uncertainty, in particular from the euro area, remained limited.

However, it said China was unlikely to repeat the near 10 per cent growth average recorded over the first three decades of its reform period.

Even so, Australia's number one trading partner is forecast to grow at an average annual pace above eight per cent over 2013/17.

The Asian giant grew at an annual pace of 7.4 per cent as of the September quarter, its slowest pace since the depths of the GFC (Global Financial Crisis).

The Paris-based institution attributed the pullback from the double-digit expansion to slower growth in demand for China's exports, along with lower growth in the labour force and waning productivity gains.

The International Monetary Fund (IMF) warned on Friday that one key risk to Australia's favourable economic outlook would be if China's economy slowed more sharply than expected.

The OECD report was presented at the ASEAN Business Summit in the Cambodian capital.

Phnom Penh will also play host to the East Asia Summit that starts on Monday, to be attended by Prime Minister Julia Gillard and Trade Minister Craig Emerson.