SINGAPORE (Reuters) – International Monetary Fund economists said on Tuesday that Singapore and other Southeast Asian economies are seeing downgrades to their 2023 growth outlooks because slowing global growth will outweigh the positive impact from China’s economic reopening.
Chief economist Pierre-Olivier Gourinchas told a news briefing on the IMF’s latest global growth forecasts these forces prompted the IMF to reduce Singapore’s GDP growth outlook for 2023 to 1.5% from a 2.3% forecast issued last October.
IMF’s 2023 forecast for ASEAN-5 – Singapore, Malaysia, Vietnam, Indonesia and the Philippines – was cut to 4.3% from 4.5% in the October forecast. The fund’s 2024 forecast was also cut by 0.2 percentage point to 4.7%.
Daniel Leigh, division chief of the research department at the IMF, told Reuters that ASEAN’s rapid growth in 2022 of 5.2% was a one-off, while noting the surprising speed that China had reopened this year.
“It was just six months ago, we were talking about lockdowns and so on. They’ve just made a very rapid shift,” Leigh said, noting how this had quickly translated to visible numbers like bookings with the potential to raise growth in the tightly integrated Southeast Asian region.
Still, he noted that geopolitical fragmentation was a negative for the outlook for everyone, even though economies like Vietnam benefited from supply chains relocating out of China. Vietnam’s economy grew 8% in 2022, though the IMF expects growth to slow to 5.8% this year as authorities address inflation.
(Reporting Xinghui Kok; Writing by David Lawder; Editing by Tom Hogue and Ed Davies)