Malaysia growth forecast for 2017 revised up - ADB

Henrietta Brewer
December 15, 2017

South Asia will remain the fastest growing of all subregions in Asia and the Pacific, despite a downward revision from previous projections from 6.7% to 6.5% in 2017, and is expected to pick up to 7% in 2018.

The regional lender in its December Asian Development Outlook Supplement now expects the country's gross domestic product (GDP) growth to average 6.7% this year and 6.8% next year, from 6.5% and 6.7% estimates in its September Asian Development Outlook 2017 Update.

"Recovery in the Indian economy is more subdued than assumed earlier due to rising crude oil prices, soft private sector investment and weather-related risk to agriculture," said ADB chief economist Yasuyuki Sawada.

The Philippines is also expected to outpace Southeast Asia's projected 5.2% and the 6.0% forecast this year for "developing Asia" that consists of 45 of ADB's 67 members covered by the report.

In the report, ADB forecast that economic expansion in developing Asia will accelerate to 6 per cent in 2017 thanks to stronger than expected exports and domestic consumption.

The Philippines and Vietnam are expected to reach the same growth level this year.

Gross fixed investment more than tripled its growth rate over previous year with the implementation of several large projects in the service and manufacturing sectors and higher spending by public corporations, driving double-digit growth in imports.

The Asian Development Bank (ADB) has raised its economic growth forecasts for the Philippines amid strong infrastructure investment and robust consumption. With this growth pace, the government is confident the economy is on track to meeting the full-year target range of 6.5 percent to 7.5 percent this year. Growth projections for the United States remain unchanged at 2.2% in 2017 and 2.4% in 2018.

"Infrastructure investment continued to play important roles in Indonesia, the Philippines and Thailand". "Countries can further take advantage of the global recovery by investing in human capital and physical infrastructure that will help sustain growth over the long term".

Combined growth for the major industrial economies was revised upward to 2.2 percent for 2017 and 2 percent for 2018.

"Going forward, the Thai economy is projected to register growth of 3.4% in 2018, supported by a pickup in public investment that largely offsets weaker investment in the private sector".

Food price inflation year on year to October was also notable at 4.0 per cent.

Headline inflation settled at 3.3% in the 11 months to November, matching the BSP's full-year forecast and keeping within its 2-4% target band.

Inflation is expected to rise on higher prices for oil and rice and increasing consumer demand, Ms Kirida said.

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