The Asian Development Bank (ADB) has scaled down its growth forecast for Southeast Asia’s major markets due partly to an expected economic slowdown in the Philippines following the devastation brought by Supertyphoon “Yolanda.”
In a report released Wednesday, the ADB said the Association of Southeast Asian Nations (Asean)-5 region, composed of Indonesia, Malaysia, Philippines, Singapore and Thailand, would grow by 4.8 percent in 2013.
This was slower than the multilateral lender’s previous forecast of a 4.9-percent expansion this year. In 2014, the ADB said economic growth in the region would pick up to 5.2 percent. This is also lower than the previous forecast by 0.1 percentage point.
“Southeast Asia’s growth forecast is tempered. Typhoon damage will moderate rapid growth in the Philippines before major reconstruction gets under way,” the ADB said in its Asian Development Outlook supplement report.
The ADB said the current economic unrest in Bangkok would also undermine Thailand’s growth “over the forecast horizon.”
Singapore is expected to buck the trend and post a more rapid expansion in 2013 in light of strong third-quarter growth supported by externally oriented sectors like exports. “Growth forecasts for the rest of the subregion’s economies are generally in line with previous assumptions,” the ADB said.
The growth forecast for the Asean-5 region is slower than the projected 6-percent expansion for the entire Developing Asia area, which includes sub-regions like Central Asia, East Asia, South Asia, Southeast Asia and the Pacific Islands.
Next year, growth in Developing Asia is expected to accelerate to 6.2 percent on the back of stronger economic conditions in the United States and other high-income countries, which will lead to stronger demand for Asian exports.
Last October, the ADB said the Philippine economy would grow by 7 percent this year, matching the high end of the government’s target range of 6 to 7 percent. This forecast, however, was made before typhoon Yolanda made landfall.
While the full extent of the typhoon’s damage is still being assessed, the government earlier said economic growth might slow to 4.1 percent in the fourth quarter of the year from more than 7 percent in the first three quarters of 2013.—Paolo G. Montecillo