High import content in export production and investment is evident across the region. Recent import compression should support current account positions amid weak exports. However, the multiplier effects of import plunge on investment will likely depress GDP growth.
External imbalances are headwinds facing the fast-growing economies of Indonesia and the Philippines. We have a constructive view of the CADs in these economies as investment has been an important contributor. Reliance on portfolio and other foreign inflows is the key risk.