Asia Economy

Glowing assessments of Papua New Guinea's economic outlook see natural resource wealth leading growth for this year, with positive implications for the country's broader development. However, external factors threaten to post challenges to a major liquefied natural gas (LNG) project.

Sarawak’s economy thrived in 2011, with record inflows of investment and a revving of the state’s growth engines sparked by projects such as the Bakun Dam and the Sarawak Corridor of Renewable Energy (SCORE).

A $1.66bn stimulus plan announced earlier this autumn is expected to stimulate domestic demand in the Philippines as effects from the ongoing global economic turbulence continue to impact the country’s economy. The programme is designed to make up for government underspending that many claim has led to lower-than-expected growth in the first half of 2011, but ensuring that the money is spent in a timely and efficient manner may be a challenge.

It has been an eventful year for Sabah, characterised by growing streams of investment flowing into the state, enhanced economic cooperation, improved trade relations and several significant offshore oil discoveries, including one announced in November by the national oil corporation, Petronas.

Plans are in place to develop Indonesia’s nuclear power capacity to overcome the country’s shortage of electricity and ease its dependence on hydrocarbons. However, some concerns remain as to the safety of atomic energy in a quake-prone region so soon after the disaster in Japan, with opponents to the scheme pushing alternative energy as the answer to Indonesia’s power needs.

With many sectors of the economy having performed solidly over the past 12 months, Malaysia is hoping for more of the same in 2012. Indeed, foreign direct investment (FDI) is up, inflation well contained, and the financial sector steady. However, at least some impact from the European debt crisis is expected, with demand for exports widely predicted to ease in 2012.