Yolanda to moderate growth but rehab to spark rebound – ADB

MANILA, Philippines - The Asian Development Bank (ADB) said the strong growth of the Philippine economy would slacken this year due to the damage brought by Super Typhoon Yolanda but would rebound next year as major reconstruction gets underway.

In its Asian Development Outlook (ADO), the ADB said the devastating impact of Typhoon Haiyan (Yolanda) is tempering the Philippines’ 2013 growth, but reconstruction is expected to boost growth as it ramps up in 2014.

While Philippine economic growth remains at over seven percent, this may slip in the six to 6.5-percent growth range due to typhoon damage.

Meanwhile, the ADB said Southeast Asia’s economic growth outlook was tempered by 0.1 percentage point due mainly to the devastation of Typhoon Haiyan and the political unrest in Thailand. The sub-region is expected to post growth of 4.8 percent in 2013 and 5.2 percent in 2014.

Indonesia will see slow recovery as exports crawl on poor domestic demand, weighed down by higher interest rates, the multilateral funding agency said.

The economic growth forecast for the 45 developing member nations of the ADB was placed at six percent this year, improving to 6.2 percent in 2014.

Nonetheless, ADB chief economist Changyong Rhee said developing Asian economies remains resilient.

“The region has performed well in 2013 and is now poised to benefit from the further signs of growth momentum in the advanced economies,” he added.

Expected average inflation in developing Asia remains as forecast in October: 3.6 percent in 2013 and 3.7 percent in 2014.

For Southeast Asia, inflation is expected remain stale at 4.5 percent from the earlier forecast of 4.7 percent this year, and 4.2 percent for 2014.

Advanced economies of Japan, the euro area and the US are on track to meet the October forecast of 0.9 percent growth in 2013. These economies will jointly grow by 1.9 percent growth in 2014, up 0.1 percentage point from the October forecast.

The outlook for the People’s Republic of China (PRC) growth is increased by 0.1 percentage point to 7.7 percent in 2013 and 7.5 percent in 2014 on the back of rising infrastructure investment.

This boosts the overall average of the East Asian forecast by the same magnitude to 6.7 percent for both 2013 and 2014 as indicators in other economies in the sub-region are generally in line with October assumptions.