Will extreme market panic derail ASEAN’s growth story?

Medium-term prospects are still bright, says Finance Minister Heng.

The region’s growth story remains intact despite escalating market volatility, Singapore’s Finance Minister Heng Swee Keat said in a speech on Friday.

Speaking at the opening ceremony of the ASEAN+3 Macroeconomic Research Office (AMRO) as an international organisation, Heng said that recent market turmoil will not derail Asia’s growth story.

“We know that financial markets sometimes over-shoot and over-react...Investors must not lose sight of the fact that a number of important initiatives, such as the Trans-Pacific Partnership and the ASEAN Economic Community, offer considerable investment and business opportunities over the medium term,” Heng said.

He acknowledged that the fairly widespread nature of the sell-off in markets in recent weeks highlights the increasing interconnection between countries. However, he also stressed that these linkages will drive the region’s future growth.

Cross-border capital flows and trade links have an increasingly large impact on domestic financial and economic conditions.

“Notwithstanding transitional pains, the structural growth story in Asia remains intact...Indeed, the integration of regional economies and markets will continue to underpin their medium-term growth prospects,” Heng said.