The Asian Development Bank has cut its growth forecasts for most Asian sub-regions but kept that for the so-called “Asean 5,” saying the Philippines and its neighbors will drive global growth as the prolonged debt crisis in the euro zone drags the world economy.
In its latest growth outlook report, ADB said it is keeping its 5.6-percent average growth projection for this year for the multilateral funding agency’s “Asean 5” definition, which includes the Philippines, Indonesia, Malaysia, Thailand and Vietnam.
It also maintained its growth forecast for the entire Southeast Asia, which adds also includes Brunei, Cambodia, Laos, Myanmar and Singapore.
This is despite the drag caused by unfavorable external developments, led by the debt woes in the euro zone that has tempered rise in global demand.
“Despite the weaker external environment, growth in Southeast Asia is expected to remain robust, supported by strong domestic demand,” ADB said in the report titled, “Sluggish Global Economy Weighs on Asia’s Growth.”
ADB said investments by local firms are rising and household consumption remains robust in the Philippines and the rest of the Asean 5. Domestic demand is thus offsetting the adverse effects of global economic woes on the performance of the five countries.
The Philippines and the rest of Asean 5 will serve as growth drivers for Asia and the rest of the world for this year, the developmental institution said.