Southeast Asian countries that have recently focused on disclosing economic data for the second quarter have found that the whirlpool of Sino-US trade wars has dragged their economic growth to the lowest level in recent years. Affected by the trade war and the global economic slowdown, Singapore’s second-quarter gross domestic product (GDP) grew by 0.1% year-on-year, the lowest growth rate in 10 years. Singapore’s Ministry of Trade and Industry on the 13th once again lowered the forecast of Singapore’s economic growth this year to 0 to 1.0%, lower than the previous forecast of 1.5% to 2.5%.
In addition to Singapore, the second quarter growth of Indonesia, the Philippines and Thailand was also lower than the first quarter. Thailand’s National Economic and Social Development Committee said on the 19th that GDP in the second quarter of this year increased by 2.3% year-on-year, down from 2.8% in the first quarter, the slowest growth rate since the third quarter of 2014. The Bank of Thailand said on the 19th that it will cut its previous forecast of economic growth of 3.2% in 2019. In June this year, the Bank of Thailand lowered its GDP growth forecast for 2019 from 3.8% to 3.3%, while the Thai economy grew 4.1% last year. Indonesia’s GDP in the second quarter of this year increased by 5.05% year-on-year, down from 5.27% in the same period last year and 5.07% in the first quarter of this year, the lowest quarterly growth rate in two years.
In contrast, Malaysia’s economic data seems to be more optimistic. The data released by the central bank last week showed that GDP in the second quarter of this year increased by 4.9% year-on-year, higher than 4.5% in the first quarter. However, analysts and policymakers warn that the increase in global risk poses a challenge to Malaysia’s prospects. The escalation of global trade tensions may reduce GDP growth by 0.1 percentage points.
Singapore’s Lianhe Zaobao said that the direct or indirect impact of the Sino-US trade war on Asian economies has gradually emerged. Elkan, a professor at the University of Indonesia, said that the trade war has caused some of the production capacity to shift out of China, and Southeast Asian countries seem to benefit, but in reality they are placed in longer-term risks. Elkan said that Southeast Asian countries are facing the threat of the US tariff stick “the next turn is you.” In the face of the US unilateralist policy, small countries will not be on an equal footing. The best case is to return to the trade framework based on rules and the multilateral system.
Under the pressure of economic slowdown, some Southeast Asian countries have pinned their hopes of boosting the economy on strengthening exports to China. According to Indonesia’s “Jakarta Post”, the EU has imposed restrictions on Indonesian palm oil imports since mid-March, but at the same time China will cancel the import quota for palm oil, which will bring a new market to Indonesia. Affected by the Sino-US trade war, Chinese companies decided to stop buying American agricultural products. This move is expected to boost Indonesian palm oil exports to China. Among all palm oil export destinations in Indonesia in the first half of the year, China was the only market with positive growth in the commodity.