Abstract
Most Southeast Asian economies remain highly integrated with the global economy. Economic growth and other dimensions of the regional economies are therefore substantially affected by global developments. The year 2012 was marked by significant headwinds and challenges emanating from the global environment.
First, global demand for the region’s exports grew weakly as the major global economies endured another year of challenges. Financial and other stresses also emanated from the major economies. The eurozone economies continued to suffer the consequences of the sovereign debt crisis: fiscal austerity depressed demand while business and consumer confidence was dampened. The United States was in better shape but there too economic growth was mediocre, with a material deceleration in capital spending by the business sector that grew wary over the risks of political impasse over key budgetary decisions. China saw a clear trend of slowing growth through the year which was only beginning to reverse in the third quarter. Japan saw a rebound from the effects of the triple disasters of March 2011, but the recovery lost momentum as the year progressed.
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