THE Asian Development Bank (ADB) held steady its growth projections for South-east Asia in 2024 and 2025 on “solid improvement” in domestic and external demand.
The region – which includes the 10 member nations of Asean and Timor-Leste – is expected to grow 4.6 per cent in 2024 and 4.7 per cent in 2025, up from 4.1 per cent last year, said the bank on Wednesday (Jul 17) in its update of its flagship outlook report published every April.
Consumption – bolstered partly by stable prices and increasing tourism-related activities – continued to drive South-east Asian economies despite the tight monetary landscape, said ADB.
Other drivers include the expected export recovery as production expands and increased infrastructure spending in the region’s larger economies that continues to fuel investment demand and growth.
July’s forecasts for all major Asean economies remain unchanged from April’s estimates. This year, the Philippines and Vietnam are expected to grow 6 per cent, Indonesia 5 per cent, Malaysia 4.5 per cent, Thailand 2.6 per cent and Singapore at 2.4 per cent.
For the Philippines in particular, moderating inflation and anticipated monetary easing in the second half of 2024 are expected to boost household consumption and investment.
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Firm domestic demand coupled with goods exports recovery drove first-quarter growth in Asean’s fastest-expanding economy.
This is similar to the region’s other star performer Vietnam, whose growth was bolstered by strong trade recovery and the revival of domestic demand as monetary policy remained accommodative. ADB expects the nation’s economic recovery to continue.
Easing inflationary pressures
Inflation estimates for South-east Asia in 2024 and 2025 remain unchanged at 3.2 per cent and 3 per cent, respectively, below last year’s 4.1 per cent.
The bank noted that inflation fell in most economies this year, as food prices worldwide eased in spite of volatility in oil prices.
July’s inflation forecasts for all major Asean economies remain unchanged from April’s estimates, with the exception of Thailand.
The kingdom’s inflation for 2024 was revised downwards to 0.7 per cent from April’s projection of 1 per cent, while that for 2025 was tweaked to 1.3 per cent from April’s estimate of 1.5 per cent.
ADB explained that Thailand’s average inflation from January through May was below April’s expectations, with prices of fish, pork and fresh vegetables being lower than expected due to a large market supply.
Meanwhile, inflation estimates for Myanmar and Laos were revised upwards due to the pass-through effects from currency depreciation and steadily rising core inflation, respectively.
