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ADB sticks to S-E Asia’s 2016 forecast but lowers Republic’s outlook

SINGAPORE – The Asian Development Bank kept its growth estimates for South-east Asia this year at 4.5 per cent, saying expansion in the Philippines and Thailand can steady the region but warned of risks from Indonesia, Malaysia, Singapore and Vietnam.

SINGAPORE – The Asian Development Bank kept its growth estimates for South-east Asia this year at 4.5 per cent, saying expansion in the Philippines and Thailand can steady the region but warned of risks from Indonesia, Malaysia, Singapore and Vietnam.

“Six of 10 economies (in South-east Asia) are forecast to grow faster than in 2015. The forecast is retained despite slight downgrades for Indonesia, Malaysia, Singapore and Vietnam because of counterbalancing by unexpectedly strong performances in the Philippines and Thailand,” the ADB said in an update yesterday of its Asian Development Outlook released in March.

The ADB also cut its 2017 forecast for the region to 4.6 per cent from 4.8 per cent in its March outlook, singling out softer prospects in Indonesia and Singapore amid a fragile external environment.

Sluggish global growth has dampened prospects for Singapore, where private fixed investment has fallen largely on weakness in private housing investment and the labour market has softened, ADB said, as it narrowed its forecast for Singapore to 1.8 per cent this year from 2 per cent previously. It also trimmed Singapore’s 2017 forecast to 2 per cent from 2.2 per cent in its March outlook.

“GDP growth in the second half of this year is expected to ease from the 2.1 per cent pace seen in the first half … In August, the government said that externally oriented sectors such as finance and insurance had slowed and it expected construction would slow as well. Moreover, it added, the improvement in manufacturing in April–June may not be sustained under sluggish global conditions,” ADB said, noting weakness in economic data for July, where manufacturing production dropped by 3.6 per cent, non-oil domestic exports plunged 10.6 per cent and the purchasing managers’ index contracted further.

“These factors, together with the downward revision in growth projected for the major industrial economies, prompt a shaving of Singapore’s growth forecasts, with a modest pickup in growth still expected in 2017,” it said. Agencies

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