ASEAN Integration Report 2015

Executive Summary

1. The ASEAN Integration Report (AIR) 2015 provides a comprehensive assessment of progress and achievements, and evaluates the impact of ASEAN economic integration, since the adoption of the ASEAN Economic Community (AEC) Blueprint in 2007. The Report covers key measures across the four pillars of the AEC 2015 namely (i) the Single Market and Production Base; (ii) the Competitive Economic Region; (iii) Equitable Economic Development; and (iv) ASEAN’s Integration into the Global Economy. To allow for a more focused impact evaluation, the Report also contains a thematic chapter on the Priority Integration Sector (PIS) to evaluate the quantitative and qualitative progress made through, and the achievements of, this sectoral approach to economic integration.

2. The overall structure of ASEAN economies has changed since the adoption of the AEC Blueprint in 2007 with the growing importance of the services sector. The share of the services sector in the economy steadily increased to reach 50.2% in 2014 while both the industry and the agriculture sector’s share declined and stood at 38.0% and 11.0% respectively. Growth in the region has been driven by an increasing share of foreign direct investment (FDI) inflows to the services sector, as well as a solid performance in the trade sector, contributing to the region’s output expansion.

3. Notwithstanding a more subdued growth trend in recent years, globally and in some ASEAN Member States (AMS), the growth outlook in the region remains relatively robust and better than the global average. The global growth outlook is projected at 3.3% in 2015, slightly lower than last year’s growth at 3.4%. While ASEAN’s economic performance remained resilient in 2014 at 4.6%, the region is projected to sustain its growth momentum in 2015 before accelerating to 4.9% in 2016.1 The relatively slower regional output growth in 2014 largely reflected lower growth by most of the larger economies in ASEAN (Indonesia, the Philippines, Singapore and Thailand) while Malaysia, Myanmar and Viet Nam recorded higher growth rates in 2014 compared to 2013.

4. Regional economic integration will continue to contribute to economic resilience and growth performance. Looking to 2015 and beyond, the macroeconomic landscape of ASEAN will continue to transform to weather challenging global economic conditions. Continued efforts to implement economic integration initiatives embodied in the AEC will have a significant, positive influence on trade and FDI, promoting overall economic growth in the region as well as stimulating structural transformation across ASEAN economies.

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