Asian Development Bank (ADB). AFP FILE PHOTO
MANILA, Philippines–Growth rates in Asia Pacific have been disappointing so far, but the recent collapse of oil prices might help the region’s economies make up for lost ground, according to the Asian Development Bank (ADB).
In a new report, the Manila-based aid bank announced a new set of revisions—mostly downwards—to growth projections for Asian economies.
Following a disappointing nine months, the ADB’s growth forecast for the Philippines for this year was also cut, reflecting the general weakness in the region.
“Growth in the first three quarters of this year were somewhat softer than we had expected,” ADB chief economist Shang-Jin Wei said in a statement accompanying the bank’s Asian Development Outlook supplement released Wednesday.
ADB forecasts gross domestic product (GDP) growth for the region of 6.1 percent in 2014, down from 6.2 percent expected in September, and 6.2 percent in 2015, down two-tenths of a point from the previous projection.
The Philippines, for its part, is expected to grow at a slower 5.8 percent in 2014, down from the September forecast of 6 percent. “Robust private consumption and higher private investment and net exports were insufficient to balance unexpectedly weak public spending,” the report read.
Growth forecasts for most major Southeast Asian countries were also trimmed. Growth in Indonesia, Thailand and Singapore are now expected to be slower than first expected. Growth projections for Malaysia, which unseated the Philippines as the region’s top performer, were kept steady, while Vietnam is now expected to perform better than the previous forecast.
A glimmer of hope remains for economies in the region as oil prices continue to dive, which should be a boon to both consumers and businesses.
Based on estimates, lower oil prices may boost spending enough to add as much as half a percentage point to economic growth for most Asian countries that import most of their fuel needs, the ADB said.
“Depending on how long the price decline persists, it could boost growth in many countries,” the ADB report said.
Originally posted at 3:13 pm | Friday, December 17, 2014