Illustrative image. (Source: Internet)Malaysia will be the second biggest long-term beneficiaries from the recently concluded Trans-Pacific Partnership (TPP) agreement, according to Credit Suisse.
Credit Suisse was quoted by New Straits Times on October 7 as saying that Vietnam could see a 10 percent boost to GDP by 2025, while Malaysia’s economy could grow 5 percent and Singapore is likely to be a relatively smaller beneficiary.
Economist Michael Wan from the Singapore-based research house at Credit Suise Group AG expected the manufacturing sector to be the biggest beneficiary in Vietnam and Malaysia.
He said there could be a slight negative impact on non-TPP Asian countries, the benefits could be sizeable if these countries eventually join the deal, with GDP growth ranging from 2 percent to 7 percent.
For instance, Thailand is forecast to see just 0.4 percentage points GDP shaved off by 2025, but the country could enjoy a 7.6 percent boost to GDP when it joins the TPP, he added.
Based on a Peterson Institute study, sectors which could gain the most include Vietnam’s textiles, apparel and footwear, electronics, and construction; Malaysia’s electronics, apparel and footwear; and Singapore’s garment, footwear and machinery.
Meanwhile, Fitch Ratings said while the TPP will be a significant contributor to economic integration over the long term, it is unlikely to be a game changer for the economic prospects in the short term.
If the TPP is ratified, the most significant consequence will be in setting rules and guidelines under which economic integration deepens around much of the Pacific Rim.
The agreement will likely be positive to varying degrees for those within the pact and may divert trade and investment from non-participating countries.
Within the Asia-Pacific region, China, Thailand, the Philippines, the Republic of Korea and Indonesia have not participated in the TPP.
The TPP covers 12 countries including the US, Japan, Brunei, Chile, New Zealand, Singapore, Australia, Canada, Malaysia, Mexico, Peru and Vietnam./.