| Azlan Othman |
THE Asian Development Bank (ADB) has forecast Brunei Darussalam’s deflation to be slightly moderate in 2016, as economic growth picks up. However, subsidies and price controls will continue to keep inflation low, it said in its latest Asian Development Outlook 2016 report published on July 18.
According to the report, growth in Asia and the Pacific‘s developing economies for 2016 and 2017 will remain solid, as firm performances from South Asia, East Asia and Southeast Asia help to offset softness from the US economy, and near-term market shocks from the Brexit vote.
ADB also forecast 2016 growth for the developing economies at 5.6 per cent, below its previous projection of 5.7 per cent. For 2017, growth is seen unchanged at 5.7 per cent.
“Although the Brexit vote has affected Asia’s currency and stock markets, its impact on the real economy in the short-term is expected to be small,” said Shang-Jin Wei, ADB’s chief economist. “However, in light of the tepid growth prospects in the major industrial economies, policy makers should remain vigilant and be prepared to respond to external shocks to ensure that growth in the region remains robust.”
The report noted that growth in 2016 and 2017 is led by South Asia and India in particular, which continues to expand strongly, while the People’s Republic of China (PRC) is on track to meet earlier growth projections.
Meanwhile, ADB said that the growth outlook for Southeast Asia remains at 4.5 per cent in 2016 and 4.8 per cent in 2017. Outcomes in the first half of the year were as projected in March for all economies, except Vietnam.
No GDP economic growth figure for this year and for 2017 was available for Brunei Darussalam.
ADB further said that private consumption, aided by lower inflation, provided strong support to most economies in the region in 2016, and is projected to pick up in 2017. Lacklustre export performance amid weak global demand is limiting growth potential in most countries.
The more open economies will remain susceptible to external risks, such as a greater-than-expected slowdown in PRC, weaker growth in the major industrial economies, and sharply lower oil prices.
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