Dec 18, 2022
The Asian Development Bank (ADB) just released its Asian Development Outlook (ADO) 2022 Supplement in December. What is its prediction on ASEAN economy? How will China chug along when Beijing rolled back its repressive pandemic restrictions earlier this month?
The 2022 forecast for Southeast Asia is upgraded from 5.1% to 5.5% on robust consumption and tourism recovery in Malaysia, the Philippines, Thailand, and Viet Nam.
The 2023 forecast is revised down to 4.7% as global demand weakens (See Graph above).
Among the ASEAN6, the top 3 in 2022 are Viet Nam (7.5%), the Philippines (7.4%), and Malaysia (7.3%), and in 2023: Viet Nam (6.3%), the Philippines (6.0%), and Indonesia (4.8%) (Table 1).
Thailand accelerated in 2022 mainly on a surge in service exports with the return of international tourists. Private consumption and private investment also expanded. Exports of goods were buoyed by strong demand for most major export products. GDP forecasts are revised up from 2.9% to 3.2% for 2022, compared with 1.5% in 2021, but revised down from 4.2% to 4.0% for 2023 as weaker demand from the rest of the world weighs on exports.
For China, forecast of ADO 2022 Supplement is reduced to 3.0% for 2022, compared with 8.1% in 2021, and to 4.3% for 2023. This is in line with the views that the end of pandemic restrictions will eventually usher in an economic rebound even though at least in the short term it sparks a risk of supply chain disruptions and muted demand in a population with limited immunity.
The earlier-than-expected end to Covid curbs in December may be triggered by a poor economic performance in November: retail sales declined by 5.9%, unemployment rising to 5.7%, and investment in the property sector, which pulls about 30% of GDP, plunged by 9.8% in the first 11 months. It is hoped that the “strategic plan to expand domestic demand and stimulate consumption and investment until 2035” issued on December 14 may pave the way for a strong recovery next year.