IMF lowers economic growth forecast for ASEAN region

A cargo vessel at Pasir Panjang Terminal of Singapore (Photo source: AFP/VNA)

Hanoi - Singapore and other Southeast Asian Nations (ASEAN) economies are seeing downgrades to their 2023 growth outlooks because slowing global growth will outweigh the positive impact from China's economic reopening, International Monetary Fund (IMF) chief economist Pierre-Olivier Gourinchas said on January 31.

The above-mentioned factor prompted the IMF to reduce Singapore's GDP growth outlook for 2023 to 1.5 per cent from a 2.3 per cent projection issued last October, he told a news briefing on the IMF's latest global growth forecasts.

The forecast for ASEAN-5, namely Singapore, Malaysia, Vietnam, Indonesia and the Philippines, was cut to 4.3 per cent from 4.5 per cent. The group's 2024 economic growth is predicted to go down by 0.2 percentage point to 4.7 per cent.

Daniel Leigh, chief of the research department at the IMF said ASEAN is unlikely to maintain its growth pace as in 2022, with a rate of 5.2 per cent while noting the surprising speed with China's reopening this year. However, he noted that geopolitical fragmentation remains negative for everyone, although some economies benefit from supply chains relocating out of China.

Earlier on the same day, the IMF released its World Economic Outlook report, which raised its forecast for global economic growth in 2023 due to a "surprising recovery" in demand in the US and Europe, declining energy costs, and China's reopening.

It believes global growth will fall from 3.4 per cent in 2022 to 2.9 per cent in 2023, but still higher than the 2.7 per cent predicted in October 2022. It also revised its forecasts for a number of major economies such as the US, the Eurozone, the UK, China and India. The UK is the only major developed economy that is predicted to be in recession this year, with GDP to shrink 0.6 per cent as households struggle to cope with rising costs of living.

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