The Asian Development Bank is projecting the Philippine economy to shrink 8.5% in 2020 due to the impact of a protracted pandemic.
The forecast was lower than the previous estimate of a 7.3% contraction, according to ADB’s Asian Development Outlook report for September.
The ADB report said the Philippines is expected to have the deepest contraction among Southeast Asian economies this year, with Thailand projected to post a 7.8% decline; Singapore, -6.2%; Malaysia, -6%; and Indonesia, -2.2%. Only Vietnam is expected to grow this year at 2.3%.
The Southeast Asian region is expected to contract by 4.4% this year, deeper than the assumption of -3.8% made in September.
ADB said the Philippine economy is predicted to bounce back and expand 6.5% in 2021, possibly the second-fastest GDP growth next year among ASEAN economies behind Malaysia’s 7%.
“Economic growth in Southeast Asia remains under pressure as COVID-19 outbreaks and containment measures continue, particularly in Indonesia, Malaysia and the Philippines,” the ADB said in the report.
“The subregion’s growth forecast for 2020 is revised down to -4.4% from -3.8% in September. The subregion’s outlook for 2021 is also downgraded, with Southeast Asia now expected to grow 5.2% next year compared to the 5.5% growth forecast in September,” it said.
Economic activity in developing Asia is forecast to contract by 0.4% this year, before picking up to 6.8% in 2021 as the region recovers from the effects of the pandemic, the bank said.
Most of developing Asia’s subregions are forecast to contract this year. East Asia is the exception, with an upgraded growth forecast of 1.6% for 2020 on the back of faster than expected recoveries in China and Taiwan.
East Asia’s growth outlook for 2021 is maintained at 7.0%.
South Asia’s GDP is forecast to contract by 6.1% in 2020, revised up from the 6.8% contraction expected in September. Growth in South Asia is forecast to rebound to 7.2% in 2021.
The World Bank also projected a deeper gross domestic product contraction for the Philippines at 8.1% this year due to the pandemic. This projection was worse than its 6.9% estimate made by the bank during the October Philippine Economic Update.