Forecasts suggest that most of developing Asia will recover next year, except for some economies in the Pacific including the Cook Islands, the Federated States of Micronesia, the Marshall Islands, Palau, Samoa, and Tonga. Indonesia is set to pass two omnibus laws - one on job creation and the other on tax reform. “The economic threat posed by the COVID-19 pandemic remains potent, as extended first waves or recurring outbreaks could prompt further containment measures. In India, where lockdowns have stalled consumer and business spending, GDP contracted by a record 23.9% in the first quarter of its fiscal year (FY) and is forecast to shrink 9% in FY2020 before recovering by 8% in FY2021. These bills will be “key litmus tests” for the reform momentum, and will decide if Indonesia can sustainably break out of its 5 per cent growth trap, added HSBC. HSBC forecasts a “gradual labour market deterioration” in Singapore in 2020, thanks to subdued activity in external-facing sectors.

The Filipino government is set to make up for underspending in 2019 and to get back on track with the Duterte administration’s “Build, Build, Build” programme.

Singapore’s private consumption growth will likely slow from 4.1 per cent in 2019 to 3.3 per cent in 2020, said HSBC. Your feedback is important to us Separately, following the election victory of President Jokowi in Indonesia, HSBC noted that more infrastructure projects are starting construction in Indonesia, such as two refineries worth a total investment value of US$25 billion, and a new capital city worth at least US$33 billion in construction contracts. The chapter explains that wellness can be an engine of inclusive economic growth if the region leverages its rich wellness traditions, and appropriate policies are promoted by governments. Despite the delays in some Eastern Economic Corridor transport projects in Thailand, HSBC expects three projects to start construction in 2020, contributing nearly one percentage point to Thailand’s gross domestic product (GDP) in 2020.


“We are projecting a strong V-shaped recovery in GDP growth in 2021, particularly for the Plus-3,” AMRO said. “The region is about to embark on a new investment cycle, led by a planned surge in public infrastructure spending,” said HSBC in its report. Private consumption growth is projected to slow to 6.4 per cent in 2020, from 7.4 per cent in 2019, as wage gains have been declining for six consecutive quarters as of Q3 2019. Economic Snapshot for ASEAN. By signing up, you agree to our Privacy Policy and Terms and Conditions. However, infrastructure development in emerging markets tends to be particularly import-intensive, which may be a concern in Indonesia and the Philippines, as they are running an account deficit. Elsewhere, HSBC said the outlook for private consumption in Indonesia, the Philippines, and Vietnam is “more benign.”. “The region as a whole is projected to expand at 6.7 percent, with all economies forecast to return to positive growth—predicated on the effective containment of the pandemic, both regionally and globally, and on the assumption that exits from policy measures proceed smoothly,” it added. But the Philippine economy is expected to outperform Myanmar, Cambodia, Indonesia, Laos, Thailand, and Brunei in 2021, as AMRO expects them to grow by 6.2 percent, 5.4 percent, 5.1 percent, 4.6 percent, and 3.1 percent, respectively.“The region [ASEAN+3] has been severely affected by containment measures, and growth is forecast to decline by 0.3 percent in 2020. Muralla cor Recoletos Sts. Growth will rally to 6.8% in 2021, in part because growth will be measured relative to a weak 2020. Consistent and coordinated steps to address the pandemic, with policy priorities focusing on protecting lives and livelihoods of people who are already most vulnerable, and ensuring the safe return to work and restart of business activities, will continue to be crucial to ensure the region’s eventual recovery is inclusive and sustainable.”. @media (min-width: 768px) { .sm-text-left {text-align: left; } }. The key to boosting the potential of the Asean region still lies with the passing of critical reforms this year. A prolonged COVID-19 pandemic remains the biggest downside risk to the region’s growth outlook this year and next year. It assists its members and partners by providing loans, technical assistance, grants, and equity investments to promote social and economic development. [2433000,2537856,2537756,2537762,2537741,2537514,2537502], PH economy second worst performing in ASEAN—AMRO, Berlin’s much delayed new airport welcomes first flights, PH startup provides opportunities for home appliance technicians, Investing in fintech startups to empower youth, Salt as environment-friendly disinfectant, Philex earnings surge on high metal prices, NGCP completes project to improve reliability of power in Mindanao, Meralco, other firms prepare measures for typhoon Rolly, PH peso overvalued, says bank forex strategist, AREIT posts P844-M net profit in 9 months, More firms putting up employee retirement plans, AllHome, Villar foundation promote local handicraft, Anti-trust issues on suggested retail prices. Stay updated with BT newsletters By signing up, you agree to our Privacy Policy and Terms and Conditions. The ASEAN+3 Macroeconomic Research Office (AMRO) expects the Philippines to be the second-worst performing economy in the region this year as the coronavirus pandemic takes a heavier toll on the country. In a note sent to reporters on Thursday, AMRO further lowered its gross domestic product (GDP) forecast for the Philippines in 2020 from an August projection of -6.6 percent to a revised … Meanwhile, AMRO expects the Philippine economy will return to a positive growth trajectory with GDP rate 6.6 percent in 2021. This is because Malaysia will not see an one-off payment of tax refunds to corporations and households worth nearly 2 per cent of GDP in 2019 reoccur in 2020, while Vietnam is concerned about a high public debt burden. resources for all businesses and investors with an interest in ASEAN. HSBC noted that the Malaysian government is on the right track to attract more investment in the manufacturing sector and to complete large-scale infrastructure projects, though improvements in education - such as a proposal to increase English proficiency - would help to boost the low productivity in the services sector.

The inflation forecast for developing Asia is revised downwards to 2.9% this year from 3.2% forecast in April, due to continued low oil prices and weak demand. “We believe that Thailand requires more investment in order to exit the current growth malaise,” said HSBC. Further, Malaysia’s slightly contractionary fiscal policy may dampen higher-end private consumption. Thailand may also see slowing private consumption growth in 2020, according to HSBC. Tran Tuan Anh, Minister of Industry and Trade of Viet Nam. Other downside risks arise from geopolitical tensions, including an escalation of the trade and technology conflict between the United States and the People’s Republic of China (PRC), as well as financial vulnerabilities that could be exacerbated by a prolonged pandemic. 6 ADB Avenue, Mandaluyong City 1550, Metro Manila, Philippines. It was chaired by H.E. The 52nd Meeting of the ASEAN Economic Ministers (AEM) was held virtually on 25 August 2020. The economic fallout from the Covid-19 pandemic is expected to be severe. Asean should see further growth in 2020, thanks to a surge in public infrastructure spending and a relatively stable private consumption, though enacting key reforms this year is critical to boosting potential this decade, said HSBC. Please confirm for access to all your SPH accounts.
HSBC is “bullish” on Vietnam’s private consumption thanks to its rising wages and booming tourism, even as private consumption growth is set to moderate from 6.9 per cent in 2019 to 6.6 per cent in 2020. Social assistance spending in Jan 2020, coupled with rising economic activity and employment thanks to public investment, should hold Indonesia’s private consumption growth steady at 5.0 per cent in 2020, said HSBC. “The region is about to embark on a new investment cycle, led by a planned surge in public infrastructure spending,” said HSBC. That said, increasing foreign direct investment (FDI) into these countries should help to offset the wider account deficits. HSBC expects the Philippines, Indonesia, Thailand, and Singapore to expand their fiscal policies to increase public infrastructure spending.

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