ASEAN faces an economic slowdown this year due to a weakening global economy but there is no risk of stagflation, Singapore's trade minister said on Tuesday.
Trade Minister Lim Hng Kiang, who chaired a meeting of Association of Southeast Asian Nations (Asean) economic ministers, said many Asean states were likely to post economic growth of five to six percent despite rising inflation.
'When we look into the external environment in the immediate future, we recognise that it will be more difficult than, say, last year,' he told a news conference on the first full day of the five-day gathering.
'As to whether we consider conditions going forward to present challenges of stagflation to us, I think the conditions are very different.' An environment of high inflation and slowing growth is sometimes referred to as 'stagflation'.
While most of Asean's 10 member nations face inflationary pressures, they are also likely to post respectable economic growth, Mr Lim said.
'Growth is quite positive, quite decent in each country. Indonesia is doing more than 6.0 percent and many of the Asean countries are doing around five to six percent,' he said.
There have been concerns that with soaring global oil prices and a US economic slowdown spreading to Japan and Europe, Asean risked falling into stagflation and rising unemployment.
'We do recognise the inflation part, but growth is still fairly robust, still generating jobs,' Mr Lim said. 'We recognise the risk of very low growth or recessionary conditions in the future.'
Asean as a bloc had done well and the outlook for this year was promising, the ministers said in a joint statement.
Total Asean trade jumped almost 32 per cent in the first quarter of this year, they said.
Asean also received 61.5 billion US dollars (S$87.5 billion) in investments in 2007, the highest since 1998, they added. -- AFP
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