The Asian Development Bank has cut its forecast for economic growth in Southeast-Asia this year by 0.1 percentage points to 3 percent. It raised next year’s gross domestic product forecast to 5.1 percent from 5 percent, saying economies are expected to continue easing overall restrictions and reviving economic activities. Southeast-Asia’s economies contracted by a combined 4 percent in 2020.
The ADB said this year’s downward revision was due to the continuing impact of the Coronavirus pandemic.
“Subregional growth slowed modestly in Q3 2021 as mobility restrictions tightened in the quarter to curb the spread of the highly transmissible Delta Coronavirus variant,” it said. “Growth forecasts for Malaysia and Vietnam are downgraded after contraction in Q3 2021 left a pessimistic outlook for the rest of the year. By contrast, economic prospects for the Philippines, Singapore, and Thailand improved after their economic performance in Q3 surprised on the upside. Growth forecasts for the rest of the subregion are retained.”
The ADB cut its 2021 growth forecast for developing Asia to 7 percent from its September prediction of 7.1 percent growth. It also cut its 2022 gross domestic product estimate to 5.3 percent from 5.4 percent.
The ADB said the slight downward revisions were due to slower than expected growth in the third quarter due to renewed Covid-19 outbreaks.
“Developing Asia’s steady progress in dealing with Covid-19, through continued vaccination drives and more strategic application of containment measures, helped boost growth prospects in the early part of the year,” said ADB Acting Chief Economist Joseph Zveglich, Jr. “However, new outbreaks in the third quarter muted gross domestic product growth, and the advent of the Omicron virus variant is causing renewed uncertainty. Recovery efforts will have to take these developments into consideration.”
The ADB has slightly lowered this year’s forecasts for all Asian subregions except Central Asia. It noted that developing Asia’s vaccination rate has increased significantly to 48.7 percent as of the end of November but said rates vary widely from 91.9 percent in Singapore to 2.2 percent in Papua New Guinea. Cambodia has now fully vaccinated 89.1 percent of the country’s 16 million-plus population according to the Reuters Coronavirus Tracker.
The ADB says regional inflation will remain manageable at 2.1 percent this year and 2.7 percent in 2022, allowing for a more accommodative monetary policy and supporting pandemic recovery efforts.
This article was first published in Khmer Times. All contents and images are copyright to their respective owners and sources.
