Not only the Philippines’ shining economy was affected, but Manila-based multilateral lender Asian Development Bank (ADB) said on Wednesday that also the Southeast Asia economic performance will be negatively affected by the damages brought by typhoons hitting the country, particularly the Super Typhoon Yolanda (international name: Haiyan) for 2013 and 2014.
In a supplemental release of ADB’s Asian Development Outlook, the multilateral said that the Association of Southeast Asian Nations-5 (Asean-5) would drop 0.1 percentage point in terms of gross domestic product (GDP) of the region because of Yolanda factors and the “political turmoil” in Thailand.
“Southeast Asia’s growth forecast is tempered by 0.1 percentage points in both 2013 and 2014. [Asean-5] is expected to post growth of 4.8% in 2013 and 5.2% in 2014; both forecasts are revised down 0.1 percentage points from October,” the ADB said.
The ADB also said that before major rebuilding and reconstruction efforts starts to rally the GDP by 2014, there would be moderation felt in rapid economic growth felt first, which would affect also the Asean-5 GDP improvement in 2013 as the Philippines posted top growths in previous quarters, boosting Asean performance.
“Typhoon damage will moderate rapid growth in the Philippines before major reconstruction gets under way, and the unfolding political turmoil in Thailand is expected to undermine its growth over the forecast horizon,” the ADB said.
Besides Typhoon Yolanda effects, tensions in Thailand would also impact growth in the region in terms of “consumption and tourism.”
The Asean-5 is comprised by main countries in Southeast Asia including Indonesia, Malaysia, Vietnam, Thailand and the Philippines.
“Despite uncertainties in the global economic environment, developing Asian economies remain resilient. The region has performed well in 2013 and is now poised to benefit from the further signs of growth momentum in the advanced economies,” said ADB Chief Economist Changyong Rhee.
“Destruction from the typhoon in the Philippines has brought inflation to affected localities but no big impact on the national average,” the ADB added, forecasting that inflation in the developing region would be “unchanged” amid also soft international oil prices and lower global food prices.
On the international economies, ADB said that China would grow further by 0.1 percentage point to 7.7 percent in 2013 and 7.5 percent in 2014 because of boost in infrastructure investments, which will raise East Asia GDP as well as retaining China as the best performing economy by this year and the next.
South Asian is also seen to meet growth expectations of 4.7 percent in 2013 and 5.5 percent in 2014 as Indian economy rebounded attributed to “higher industrial and agricultural output.”
“Growth in Central Asia is gradually recovering, with aggregate projections for the subregion revised up from October forecasts: To 5.7 percent from 5.4 percent for 2013 and to 6.1 percent from 6 percent for 2014. The revisions reflect stronger performance in Kazakhstan and Turkmenistan,” the ADB said.
“Advanced economies of the US, Euro area and Japan are on track to meet the October forecast of 0.9 percent growth in 2013. ADB expects 1.9 percent growth in these economies in 2014, up 0.1 percentage points from the October forecast,” it added, seeing United States and European economies to boost next year.
Pacific region, on the other hand, is seen to slow down regional growth from 7.1 percent last year to 5 percent this year, before recovering to 5.4 percent by 2014. This was because of weak international commodity prices which posted impact on major agricultural sectors in larger Pacific economies like Papua New Guinea and Solomon Islands.
ADB forecasted that the whole of the economies in developing Asia would improve its GDP to 6 percent in 2013 and 6.2 percent in 2014, while inflation would be at 3.6 percent in 2013 and 3.7 percent by 2014.
The Asian Development Outlook is ADB’s main economic forecasting data published mainly in April with an update released in October and supplements in months of July and December. Kristyn Nika M. Lazo