Growth in developing East Asia and Pacific is expected to remain resilient over the next three years, according to a new World Bank report.
Thailand growth is forecasted at 3.1% in 2017 and 3.3% in 2018. However, the region still faces significant risks to growth, and countries need to take measures to reduce financial and fiscal vulnerabilities.
Over the longer term, the report recommends that countries address constraints to sustained and inclusive growth, including by filling infrastructure gaps, reducing malnutrition and promoting financial inclusion.
The newly released East Asia and Pacific Economic Update expects China to continue its gradual transition to slower, but more sustainable, growth, from 6.7 percent this year to 6.5 percent in 2017 and 6.3 percent in 2018.
Domestic demand across much of the region was buoyant, supported by fiscal stimulus and accommodative monetary policy.
Private consumption in the large economies was buoyant in the first half of 2016. Consumption growth accelerated in the Philippines and especially in Thailand, and remains rapid in both Indonesia and Malaysia.
Investment is also holding up. In the Philippines, investment growth has steadily accelerated since 2014. In Indonesia, Malaysia, and Thailand, investment is growing at a pace comparable to 2015, although it remains volatile in Malaysia.
But net foreign direct investment (FDI) flows are diminishing in China and Thailand, and growing in Malaysia, the Philippines, and Vietnam. China recorded net negative FDI flows in the first half of 2016, for the first time since before the global financial crisis
In the rest of the region, growth is projected to remain stable at 4.8 percent this year, and rise to 5 percent in 2017 and 5.1 percent in 2018. Overall, developing East Asia is expected to grow at 5.8 percent in 2016 and 5.7 percent in 2017-2018.
“The outlook for developing East Asia and Pacific remains positive, with weakness in global growth and external demand offset by robust domestic consumption and investment,”
said Victoria Kwakwa, World Bank Vice President for East Asia and Pacific.
“The long-term challenge is to sustain growth and make it more inclusive, including by shrinking gaps in income and access to public services, especially in China; improving infrastructure across the rest of the region; reducing persistent child malnutrition; and harnessing the potential of technology to stimulate financial inclusion.”
In China, growth will moderate as the economy continues to rebalance toward consumption, services and higher-value-added activities, and as excess industrial capacity is reduced. Nevertheless, tighter labor markets will support continued growth in incomes and private consumption.
Among other large economies, prospects are strongest in the Philippines, where growth is expected to accelerate to 6.4 percent this year, and Vietnam, where growth this year will be dented by the severe drought, but will recover to 6.3 percent in 2017.
In Indonesia, growth will increase steadily, from 4.8 percent in 2015 to 5.5 percent in 2018, the report says, contingent on a pickup in public investment and the success of efforts to improve the investment climate and increase revenues.
In Malaysia, however, growth will fall, to 4.2 percent in 2016 from 5 percent last year, because of weak global demand for oil and manufactured exports.
Editing : Olivier Languepin
The Latest on Covid-19 in Southeast Asia
Thailand has largely avoided widespread community transmission of Covid-19, but the kingdom is not faring well on the economic front, with a projected contraction of 7.1 percent this year.
China’s debt-trap diplomacy: Laos’ credit rating downgraded to CCC
Laos’ debt challenge is deeply concerning, with some media commentators suggesting the country is falling into a debt trap as a result of Chinese infrastructure investments connected to the Belt and Road Initiative (BRI)
Foreign capital still heads to Vietnam
As many as 798 projects added a combined over 5.11 billion USD to their investment capital, down 23 percent year-on-year in project number but up 6.8 percent in value.
Thailand approves COVID-19 AstraZeneca vaccine for emergency use
The first lot of 50,000 doses of COVID-19 vaccine developed by AstraZeneca will arrive in Thailand early next month, after...
Interprovincial travel in Thailand amid COVID-19 controls
The State Railway of Thailand (SRT) is suspending 57 additional train services from 26 January, 2021, as part of the...
Covid-19 puts flexible space markets under strain
In the wake of operator defaults, landlords will be forced to re-evaluate the role of flexible space in their portfolios.
Thailand to put world’s largest floating solar farm into use this June
The facility, which generates power on a water surface of 72 hectares, was originally scheduled for operation in December last...
TAT launches virtual tours to 4 top destinations in Thailand
Once inside an attraction, visitors can move around using the cursor, while some of the attractions have information about its...
Thailand’s automotive sector expected to produce 1.4m cars this year
This increase in output is a result of the recovery of domestic and export markets, with the annual output for...
Subscribe via Email
Forex1 week ago
Leverage from Forex Brokers & How Beginners Can Benefit from It
Economics6 days ago
Thai economy to grow 4% in 2021 following 6.5% decline in 2020
National5 days ago
Human trafficking cases in Thailand hit decade low due to COVID-19
Banking1 week ago
Can Fintech drive a strong post-COVID-19 recovery in Asia?