Asean 5, Philippines to grow 5.9% in 2012 – ADB

The Asian Development Bank (ADB) lifted its growth forecast this year for Asean 5 to 5.9 percent because of the strong third quarter performance of the Philippines and Malaysia.

Asean 5 refers to the top five members of the Association of Southeast Asian Nations such as the Philippines, Indonesia, Malaysia, Thailand and Vietnam.

ADB’s latest Asian Development Outlook Supplement (ADOS), which was released on Friday, said that from 5.6-percent projected growth, Asean 5 will continue to grow 5.9 percent this year and 5.8 percent in 2013.

ADOS also reported that the surging economies of Southeast Asia have been a bright spot in developing Asia, with a projected overall growth of 5.3 percent in 2012 before edging up to 5.5 percent in 2013.

“Surprisingly, Southeast Asia’s economic growth has been slightly upgraded for 2012 due to stronger-than expected results through the third quarter of the year in Malaysia and the Philippines,” it added.

The report cited the Philippine economy which beat expectations with the accelerated growth of 7.1 percent in the third quarter from 3.2 percent in the same period last year.

“The strong third quarter performance was driven by services supported by sustained, accelerating growth in industrial output. Private consumption and investment, particularly in construction, held up well,” it added.

ADOS also cited Malaysia’s strong domestic demand which was driven by private consumption and both private and public investment.

Furthermore, the report stated that Thailand is expecting a strong rebound in the fourth quarter because of the low base effect from the impact of last year’s floods, adding that other economies in the subregion are holding up relatively well, except for Singapore’s open economy.

Meanwhile, ADOS continued that developing Asia will post growth of 6 percent in 2012 and 6.6 percent in 2013.

It mentioned that the robust private consumption in Southeast Asia and a mild economic recovery in China nearly balance out the weaknesses in India’s economy.

The report also warned that ongoing sluggishness and uncertainty in Europe and the United States mean that risks to the forecasts remain firmly on the downside.

Threats, opportunities
ADB Chief Economist Changyong Rhee admitted that enduring debt problems and economic weakness in Europe and the looming fiscal cliff in the United States remain very real threats to developing Asia next year.

“At the same time there are highly encouraging signs from Southeast Asia and recent data from PRC [People’s Republic of China] confirms a bottoming out of the economy, with industrial output rebounding to a five-month high in October,” the ADB official added.

Meanwhile, ADOS mentioned that stellar performance of the Philippines and Malaysia as well as the recovery in China, which was supported by a turnaround in industrial production and retail sales and solid fixed investment, are helping to offset weakness in other East Asian economies, including Hong Kong, South Korea and Taiwan.

In terms of inflation, the report said that consumer prices remains broadly benign across most of the region as a result of price declines in some food commodities, including soybean and palm oil.

“Inflationary pressures remain a concern in South Asia, however, with the subregion expected to post an annual inflation rate of 8.3 percent in 2012,” it added, while an expected spike in meat prices, lower output of grains and higher global demand will see inflation for developing Asia tick up to 4.2 percent in 2013, from a revised rate of 4 percent in 2012.

Refer http://www.manilatimes.net/index.php/business/top-business-news/36910-asean-5-philippines-to-grow-5-9-in-2012-adb

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Asean 5, Philippines to grow 5.9% in 2012 – ADB


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