[News Terms] 'AMRO' Forecasts 2.3% Growth for Korea This Year

ASEAN+3 Countries Establish CMIM for Effective Operation and Support
ASEAN+3 Expected to Grow 4.5% This Year, Uncertainty Remains High

'AMRO' stands for the ASEAN+3 Macroeconomic Research Office. It is the first formal international organization established through an agreement among ASEAN+3 countries.

ASEAN (Association of Southeast Asian Nations) consists of 10 countries: Malaysia, Thailand, Singapore, Indonesia, the Philippines, Vietnam, Brunei, Cambodia, Laos, and Myanmar, while the '+3' refers to South Korea, China, and Japan.

The scene from the 'ASEAN+3 Deputy Finance Ministers and Central Bank Deputy Governors Meeting' held in Kanazawa, Japan, last December.
[Photo by Ministry of Economy and Finance/ Yonhap News]

After the 1997 Asian financial crisis, South Korea, China, Japan, and ASEAN countries signed the Chiang Mai Initiative Multilateralization (CMIM) agreement in May 2000 to prevent future foreign exchange crises. CMIM is a system designed to prevent regional financial crises, enabling member countries to quickly cooperate and respond to potential economic crises.

CMIM operates as a regional fund where member countries' central banks enter into currency swap agreements. In the event of a crisis, countries can borrow their own currency and international currency at a predetermined exchange rate for a set period and then repay after the contract period ends.

The organization established by ASEAN+3 to effectively operate and support CMIM is 'AMRO.'

In February 2009, finance ministers from the member countries agreed to establish AMRO, which officially launched in May 2011 in Singapore. At the finance ministers' meeting held in Delhi, India, in 2013, a treaty to convert AMRO into an international organization was adopted. It was finally approved in 2016, becoming the first official international organization established through an agreement among ASEAN+3 countries.

During normal times, AMRO prepares reports on regional macroeconomic trends and outlooks. In times of crisis, it conducts macroeconomic analysis and policy recommendations for supported countries, assists CMIM’s decision-making body, and monitors compliance with CMIM withdrawal conditions. Since its elevation to a formal international organization in 2016, AMRO has been able to officially cooperate with other international organizations such as the International Monetary Fund (IMF).

Member countries of the Association of Southeast Asian Nations (ASEAN). [Graphic=Asia Economy DB]

AMRO’s expenses are allocated between South Korea, China, Japan, and ASEAN at an 80:20 ratio based on CMIM funding shares. Among South Korea, China, and Japan, the distribution ratio is 1:2:2.

On the 8th, AMRO projected South Korea’s economic growth rate for this year at 2.3%. This was announced in the 'ASEAN+3 Regional Economic Outlook (AREO),' published annually, which includes economic trends and policy recommendations for South Korea, China, Japan, and the 10 ASEAN countries.

AMRO expects the South Korean economy to benefit from increased exports due to a recovery in the semiconductor market. The economic growth rate for next year is forecasted at 2.1%. Consumer prices in South Korea are expected to rise by 2.5% this year and 2.0% next year.

The ASEAN+3 regional economy is projected to grow by 4.5% this year and 4.2% next year, supported by robust domestic demand, recovery in investment, exports, and the tourism industry.

AMRO pointed out that uncertainties in the regional economy remain significant, citing short-term downside risks such as geopolitical tensions, rising commodity prices due to climate change, and delays in China’s economic recovery.

In the long term, it identified ongoing geopolitical tensions, population aging, and climate change as risk factors for the regional economy.

This content was produced with the assistance of AI translation services.