Singapore (VNA) – Southeast Asia’s GDP growth islikely to remain at 4.5 percent in 2020, amid high risks of a re-escalation intrade tensions between the US and China, according to the latest reportproduced by the British advisory firm Oxford Economics.  

Friction between the two countries remains high and the bulkof imposed tariffs are unlikely to be lifted anytime soon, said Sian Fenner, OxfordEconomics lead Asia economist.

The region has recorded sluggish performance in the thirdquarter of 2019, with its GDP growth rising only 4.5 percent year-on-year.

Export-oriented economies have suffered the worst blow fromthe ongoing trade conflict, with Singapore only narrowly avoiding a technicalrecession in the third quarter of 2019. 

Due to the US-China trade war, trade uncertainty remains akey drag on manufacturing, exports and investment.

The report expects the Philippines, Malaysia and Indonesiato cut interest rates by a further 25 basis points over the coming quarters,followed by an extended pause with fiscal stimulus to complement central bankefforts in cushioning the economic slowdown.

That being said, not all countries enjoy the same ease infiscal maneuvering. Most Southeast Asian economies such as Thailand andthe Philippines are likely to roll out stronger fiscal impulses.

With sufficient fiscal surpluses, Singapore has the mostfiscal room to ease policy. Given the high trade uncertainty, the city-state islikely to announce measures such as cash handouts and funding support for Smalland Medium Enterprises (SMEs) in next year’s budget.

Malaysia will likely face a slowdown in GDP growth from 4.4 percentin 2019 to 4 percent in 2020, against a backdrop of slower export growth andmoderating domestic demand. 

Indonesia’s GDP growth is expected to ease modestly from 5 percentin 2019 to 4.9 percent in 2020, according to the report./.