Singapore-based ASEAN+3 Macroeconomic Research Office on Tuesday raised its 2022 growth forecast for the Philippines to 6.9 percent, the fastest in the region, from the previous estimate of 6.5 percent, as the bloc is expected to sustain its expansion despite threats from the Ukraine war and tighter financial conditions.
The new projection is contained in the latest quarterly update of the ASEAN+3 Regional Economic Outlook, which revised the April forecast.
AMRO said the Philippines would post the fastest growth this year, surpassing 6.3 percent for Vietnam, which was lowered from 6.5 percent previously. It would also be faster than 6 percent for Malaysia, 5.1 percent for Indonesia, 4.9 percent for Cambodia, 3.9 percent for Singapore, 3.5 percent for Laos, 3.2 percent for Thailand, 3 percent for Brunei Darussalam and 1.5 percent for Myanmar.
AMRO retained its 2023 growth projection of 6.5 percent for the Philippines and Vietnam. It was followed by 5.8 percent for Cambodia, 5.4 percent for Indonesia, 5 percent for Malaysia, 4.9 percent for Thailand and Laos, 3.9 percent for Brunei and 2.4 percent for Singapore.
The 6.9-percent GDP growth forecast for the Philippines this year is a shade lower than the 7 percent to 8 percent target set by the interagency Development Budget Coordinating Committee.
AMRO reduced its 2022 growth forecast for the ASEAN+3 region to 4.3 percent from 4.7 percent, reflecting the impact of the recent COVID-19 outbreak in China and stronger headwinds arising from the war in Ukraine and tighter global financial conditions.
AMRO expects a faster 4.9 percent GDP growth for the block next year.
Meanwhile, the think tank raised its 2022 inflation forecast for the region to 5.2 percent, up by 1.7 percentage points from April.
“Just as the ASEAN+3 region is starting to emerge from the COVID-19 health crisis, the protracted war in Ukraine and persistent inflation in the United States have ushered in a new set of challenges for policymakers,” AMRO chief economist Hoe Ee Khor said.Julito G. Rada
He said five months since it started, the war in Ukraine is set to persist. He said that in addition to exacerbating global supply chain woes, the war and sanctions on Russia led to higher global prices for fuel and food, causing inflation to accelerate across ASEAN+3.
Surging prices also caused the US Federal Reserve to tighten monetary policy at a faster pace than expected, which raised concerns of an imminent recession.
“Navigating this formidable environment, ASEAN+3 policymakers are now facing difficult policy trade-offs as they balance the need to sustain the growth momentum while containing the inflationary pressure,” Khor said.