MANILA, Philippines - The stellar performance of the Philippine and Malaysian economies will continue to fuel Southeast Asia's growth this year, the Asian Development Bank (ADB) said on Friday.
In its latest Asian Development Outlook Supplement, the ADB upgraded its 2012 growth forecast for Southeast Asia from 5.2% to 5.3%, on the back of the Philippines and Malaysia's better-than-expected third quarter numbers. The ADB maintained its 2013 forecast for Southeast Asia at 5.5%.
The ADB cited Southeast Asia as a "bright spot" amid a generally subdued Asian economy this year.
"Surprisingly, Southeast Asia’s economic growth has been slightly upgraded for 2012 due to stronger-than-expected results through the third quarter of the year in Malaysia and the Philippines," the ADB said.
For the ASEAN 5, the ADB boosted its 2012 growth forecasts from 5.6% to 5.9%. ASEAN 5 is composed of Indonesia, Malaysia, Philippines, Thailand and Vietnam.
"The Philippine economy beat expectations as growth accelerated to 7.1% in the third quarter, compared with 3.2% in the same period last year. The strong third quarter performance was driven by services supported by sustained, accelerating growth in industrial output. Private consumption and investment, particularly in construction, held up well," it noted.
ADB cuts Asia growth forecast
Despite Southeast Asia's rapid expansion, the ADB lowered its 2012 growth forecast for developing Asia from 6.1% to 6%, amid a slowdown in India. It also cut 2013 growth forecast from 6.7% to 6.6%.
"Enduring debt problems and economic weakness in Europe and the looming fiscal cliff in the United States remain very real threats to developing Asia next year," said ADB Chief Economist Changyong Rhee in a statement.
The ADB report attributed the slightly lower 2012 growth forecast for the region to India's slowdown. "Slower-than-expected growth for India, the newly-industrializing economies, and the two largest Central Asian economies (Azerbaijan and Kazakhstan) slightly outweighs the more rapid expansion in some major Southeast Asian economies," it said.
The ADB maintained its 2012 growth forecast for China at 7.7%, while its forecast for India dropped from 5.6% to 5.4%.