Azlan Othman
In its regular supplement of the Asian Development Outlook (ADO) 2021 published recently, the Asia Development Bank (ADB) said Asia’s 2021 economic growth outlook had been revised and down slightly to seven per cent this year and 5.3 per cent next year as the recent emergence of a highly mutated virus variant and a rise in infections globally indicate that the pandemic is far from over.
Southeast Asia’s 2021 outlook had also been revised down by 0.1 percentage points to three per cent but revised up to 5.1 per cent for 2022.
ADB’s latest estimates compare with the bank’s September forecasts of 7.1 per cent growth for 2021 and 5.4 per cent for 2022. Prospects for this year had been revised slightly downward for all subregions except Central Asia.
East Asia’s growth forecasts had been revised down marginally for both 2021 and 2022, with China now expected to grow more slowly, by eight per cent in 2021 and 5.3 per cent in 2022.
The growth forecast for South Asia had been revised down to 8.6 per cent for 2021, while the forecast for 2022 is maintained at seven per cent. India’s projection is lowered to 9.7 per cent for fiscal 2021 and remains unchanged at 7.5 per cent for 2022.
Subregional growth slowed modestly in Q3 2021 as mobility restrictions tightened in the quarter to curb the spread of the highly transmissible Delta coronavirus variant.
Elaborating more on Southeast Asian nations, the report said growth forecasts for Malaysia and Vietnam had been downgraded after contraction in Q3 2021 left a pessimistic outlook for the rest of the year.
By contrast, economic prospects for the Philippines, Singapore, and Thailand improved after their economic performance in Q3 surprised on the upside.
Growth forecasts for the rest of the subregion had been retained. In Indonesia, real GDP grew by 3.5 per cent in Q3, broadly in line with expectations in the Update as mobility restrictions adopted in July and August greatly slowed growth in all components of domestic demand.
However, consumption and investment are expected to bounce back in Q4 with infections abated and restrictions relaxed.
No figures were available for Brunei Darussalam in the latest report. However in August this year, the Asia Development Bank’s (ADB) forecast for Brunei Darussalam’s economic growth is expected to strengthen in 2021 and 2022, on an improving external environment with economic growth of 2.5 per cent this year and three per cent in 2022.
Growth in 2021 will be supported by a recovery in global demand and higher oil and gas prices, which will boost government revenue and support government consumption. Private consumption is expected to grow, as the economy continues to strengthen.
The gross domestic product (GDP) is forecast to rise in 2021 and 2022, supported by robust export growth from the Hengyi plant and higher oil and gas prices.
But increased imports due to the plant’s expansion, and continued demand for inputs will temper the trade and the current surpluses in both years.
Meanwhile, Central Asia’s growth prospects had been substantially upgraded from 4.1 per cent to 4.7 per cent for 2021 and then from 4.2 per cent to 4.4 per cent for 2022.
The Pacific is still forecast to contract by 0.6 per cent in 2021, then grow by 4.7 per cent in 2022, slightly slower than earlier forecast.
Regional inflation remains manageable, with the inflation forecast revised down a notch to 2.1 per cent for 2021 and unchanged at 2.7 per cent for 2022.