Photo of representatives at the meeting Photo: HTQT
Global and regional economic development outlook
The meeting agreed with remarks made by ASEAN+3 Macroeconomic Research Office (AMRO), Asian Development Bank (ADB) and the IMF about global economy in 2014, in which it recovers unsteadily and unevenly, growth rate at 3.3%, lower than previous forecast (October 2014). IMF forecast economic growth not to change much in 2015, at approximately 3.8%. Global economy still has to face financial risks and instabilities, oil price fluctuation, increasing geopolitical tension in Eastern Europe and Southern Asia, potential reduction in industrial manufacturing in advanced economies like the USA, UK and Europe, which are important factors that can obstruct the recovery of global economy.
The meeting admitted that those would impact the dynamic economic region of ASEAN+3. From the beginning of 2014, the economies of ASEAN+3 grow slowly and ASEAN+3 regional demands start to slow down. While leading economies in ASEAN+3 like Japan, China and Singapore face the challenge of decreasing consumption and investment, other emerging countries face the challenge of slow recovery in consumption demand. Exports are less active than forecast partly because of low global economic growth. From those remarks on global economic risks and vulnerabilities, the members expressed commitments to strive for structural reform, build financial safety net and push forward regional financial cooperation to contribute to regional economic growth and counter potential risks in time.
Enhancing regional financial cooperation
The Finance and Central Bank Deputies of ASEAN+3 recognized the results of Chiang Mai Initiative multi-lateralization with the revised Chiang Mai Initiative (CMIM) coming into force in July 2014, in which the function of preventing crisis was added, and the fund was doubled from US$120 billion to US$240 billion. The meeting noted the efforts to improve CMIM to quickly use tools to prevent and help to solve crises of member countries.
The Deputies were pleased to recognize the signing of the Agreement to raise AMRO legal position to an international organization so that AMRO can implement its monitoring operations independently. The Deputies also promised to complete necessary legal procedures to officially enact the Agreement in 2015.
The meeting adopted a progress report on the development of bond markets in local currencies in the region. The Deputies recognized four successful transactions of Credit Guarantee and Investment Facility (CGIF) in ASEAN5 countries, as well as the improvements in implementing technical assistance to develop domestic bond markets of member countries.
In this cooperation framework, Vietnam was pleased to record first successful transaction of CGIF in Vietnam in December 2014. The Fund successfully provided credit guarantee for bond issuance of Masan Group with total value up to VND2.100 billion with a 10 year tenor. While the economy and financial markets are still in difficulties, this is not only an important step forward to the formulation and development of Vietnam's bond market in general, but also a meaningful milestone to Vietnamese companies to actively engage in the regional bond markets in particular.
Future priorities of ASEAN+3 Financial Cooperation
The meeting welcomed the progress of researching future cooperation priorities in ASEAN+3 Financial Cooperation Framework, including infrastructure financing, disaster risk insurance and use of local currencies in regional commercial payments.
The 18th ASEAN Finance and Central Bank Deputies' Meeting has concluded successfully. The 19th Meeting will take place in Malaysia in 2015 under the co-chair of Malaysia and Korea.
T.Tien
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