Reducing Non-Tariff Barriers Can Boost ASEAN GDP By 4.3 Pct Over Long Run - IMF

By Kisho Kumari Sucedaram

KUALA LUMPUR, Oct 26 (Bernama) -- Reducing non-tariff barriers can boost ASEAN’s gross domestic product (GDP) by 4.3 per cent over the long run, according to the International Monetary Fund (IMF). 

IMF managing director Kristalina Georgieva said this is equivalent to adding over one-third of Malaysia’s current GDP to the bloc and creating four million new jobs when coupled with smart labour market policies.

“The regional trade within ASEAN today makes up slightly over 20 per cent of total trade, mostly in intermediate goods, compared to 60 per cent, mostly final goods, in the European Union (EU).  

“Removing trade barriers will help your economies grow faster,” she said during a plenary session at the 47th ASEAN Summit here today. 

She also supports the upgrading of the ASEAN Trade in Goods Agreement and the taking of similar steps to free up trade in services, paired with stronger financial integration and transformative joint investments.

“And yes (as well) to deeper sharing of technology, including in digital infrastructure and artificial intelligence (AI), where Singapore stands out as a global leader, and Malaysia, Thailand and Indonesia are making notable progress,” she said.

The IMF has projected global growth at 3.2 per cent this year and 3.1 per cent in 2026, while ASEAN is projected to grow 4.3 per cent in both years.

“Admittedly, this falls short of historical trends, but it is better than we feared in April,” she said.

Georgieva said improved policy fundamentals, private sector adaptability, and deepening regional and bilateral cooperation are the sources of this resilience. 

She noted that over the last decades ASEAN members have invested in strong policy fundamentals -- independent central banks, inflation targeting, fiscal rules -- and these investments are paying off.

“This work must continue and it is an area where the IMF offers cross-country analysis and the transmission line of our bilateral, regional and global economic assessments,” she said. 

Georgieva further explained the private sector dynamism has played a major role in generating growth and jobs in ASEAN countries. 

“The bloc also holds significant potential for next-generation policies to deepen trade, financial and technological integration,” she added. 

-- BERNAMA