ASEAN corporates turn more bullish as currency fluctuations wane

Almost 7 out of 10 Singapore firms are upbeat on growth.

Corporate confidence in Southeast Asia remains high despite downside risks to growth, according to the latest Global Confidence Barometer by EY.

Respondents from the region seem to believe that the worst of the currency fluctuations are over and the next 12 months will be a more stable than a volatile period. A strong 67% of SEA corporate respondents believe that the local economy is improving, a significant boost from the 35% who shared such sentiments six months ago.

Almost seven out of ten or 67% of Singapore respondents are upbeat on their growth prospects, while some 90% of respondents from Vietnam and the Philippines expect their local economies to improve.

Despite concerns over price volatility and potential changes to the interest costs, 43% of the respondents see growth as a priority, up from 27% six months ago. Businesses are also concerned about the growing geopolitical tensions and the volatile economic recovery in the Eurozone.

"We have seen the regional currencies being devalued between 33% in Malaysian ringgit and 5% of the Vietnamese dong. What the Barometer is indicating is an expectation that all of the volatility is now being factored in and companies are maintaining a balanced focus between growth and cost optimization. This is logical. Despite the volatility we believe that Asean markets are in a much better footing among all of the emerging markets," said
Harsha Basnayake, Asean Managing Partner for Transaction Advisory Services at EY