ADB revises upwards SE Asia growth forecast

MANILA, Philippines - The Asian Development Bank (ADB) has revised upwards its economic growth forecast for Southeast Asia due to strong third quarter results in Malaysia and the Philippines.

In contrast, the rest of developing Asia, including East Asia and the Pacific, was revised slightly downward.

In its latest Asian Development Outlook Supplement report released yesterday, the ADB said Southeast Asia’s economic growth recorded stronger-than-expected results through the third quarter of the year in Malaysia and the Philippines.

It said Malaysia’s domestic demand continued to be strong, driven by private consumption and both private and public investment.

“The Philippine economy beat expectations as growth accelerated to 7.1 percent in the third quarter, compared with 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,” the ADB report stated.

It revised upward its full year 2012 economic growth outlook for the Asean nations from 5.6 percent to 5.9 percent, and from 5.7 percent to 5.8 percent for 2013. Gross domestic product (GDP) growth was registered at 4.5 percent in 2011.

For Southeast Asia, its growth outlook was increased to 5.3 percent from 5.2 percent this year, although its 5.5 percent growth outlook for 2013 remained unchanged.

Growth outlook for East Asia (including China) was revised downward to 6.4 percent from 6.5 percent for 2012, and from 7.1 percent to seven percent in 2013. The region grew 8.1 percent in 2011.

For the entire developing Asia (which grew 7.2 percent in 2011), it was likewise revised downward from 6.1 percent to six percent for 2012, and from 6.7 percent to 6.6 percent for 2013.

Robust private consumption in Southeast Asia and a mild economic recovery in China nearly balanced out the weaknesses in India’s economy.

ADB chief economist Changyong Rhee said 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.