ADB also raised the region’s inflation forecast this year from 3.7 per cent to 4.7 per cent. Inflation next year has been revised up from 3.1 per cent to 3.4 per cent.
Consumption growth in all sub-regional economies rebounded strongly in the first five months this year due to the gradual lifting of pandemic-related restrictions and the reopening of markets and borders, it said.
The Asian Development Bank (ADB) recently revised its gross domestic product (GDP) growth projections for Southeast Asian countries this year to 5 per cent, slightly up from its earlier estimate of 4.9 per cent. In its Asian Development Outlook Supplement for July, the regional development bank maintained the GDP growth forecast for 2023 at 5.2 per cent.
The manufacturing and services output has been increasing in most economies, helping create jobs and lifting household incomes, it noted.
However, it cautioned that the countries in the Southeast Asian region face some significant challenges, including higher oil prices, the end of low global interest rates and trade and supply disruptions. Such factors have dimmed the outlook for some economies this year and next year.
“Smaller economies in particular are being more heavily affected by supply disruptions and inflation from higher oil prices. Tourist arrivals are picking up, albeit very slowly,” the report said.
It raised the growth projection for Indonesia from 5 per cent to 5.2 per cent due to robust domestic demand and exports. Increased uncertainty and weaker global growth have been dampening Malaysia’s prospects, it observed.
It raised the growth forecast for the Philippines from 6 per cent to 6.5 per cent for 2022 based on a stronger-than-expected first quarter performance, underpinned by rebounds in investment and household consumption.
Singapore’s growth will remain firm this year, supported by robust information technology and financial services, sustained manufacturing growth and a gradual recovery in tourism and domestic-oriented services sectors.
ADB maintained a growth forecast of 6.5 per cent for this year and 6.7 per cent for next year for Vietnam.
The economic prospects this year for Laos look dimmer due to declining consumer and business confidence caused by rising prices and a weaker local currency, the ADB report noted. However, the outlook is expected to improve in 2023.
“While there are slight improvements in industry and services growth in Myanmar, political tensions and a volatile security situation remain the major downside risks to economic recovery,” the report added.
Fibre2Fashion News Desk (DS)