GROWTH forecasts for several Asean markets have been lowered by the Asean+3 Macroeconomic Research Office (AMRO) in its July monthly update, on the back of continuing weakness in manufacturing and export figures.
In its June update, AMRO lowered its baseline growth forecast for Asean+3 as a whole to 4.9 per cent in 2019 and 2020, down from the previous 5.1 per cent estimate in early May. In its latest July update, AMRO gave revised projections for each of the Asean markets as well as China, Hong Kong, Japan, and South Korea.
Among the Asean markets, Singapore saw the largest downgrade in its growth forecast, to 1.3 per cent in 2019 and 1.5 per cent in 2020, down from May's forecast of 2.5 per cent and 2.6 per cent respectively. In July, flash figures showed Singapore's second quarter growth coming in nearly flat at 0.1 per cent, below economists' expectations of 1.1 per cent.
Smaller downgrades were seen for Malaysia (4.5 per cent in 2019 and 4.6 per cent in 2020, down from 4.6 per cent and 4.7 per cent), Myanmar (6.8 per cent in 2019 and 7.1 per cent in 2020, down from 7.3 per cent and 7.4 per cent), the Philippines (6.3 per cent in 2019 and 6.5 per cent in 2020, down from 6.4 per cent and 6.6 per cent), and Thailand (3.3 per cent in both years, down from 3.8 per cent in 2019 and 3.7 per cent in 2020).
AMRO noted that the Asean+3 region's export value continued to contract in May with the exception of Vietnam and the Philippines. While the strong performance of processing and manufacturing has helped drive Vietnam's growth, the imposition of tariffs by the United States on Vietnam steel could put near-term pressure on its exports, said the report.
AMRO's forecasts were unchanged for the five other Asean markets, while projections were lowered only marginally for China, Japan, and Korea, but more drastically for Hong Kong: 1.4 per cent for 2019 and 2.0 per cent for 2020, down from 2.7 per cent for both years previously.
"The outlook for the manufacturing sector in the Asean+3 region, particularly the Plus3 economies, is lackluster, underpinned by the uncertainties surrounding global trade," said AMRO.