IMF keeps ASEAN GDP outlook, lowers world economic forecast

The International Monetary Fund (IMF) has kept its growth outlook for Southeast Asia but lowered the world's economic growth forecast due to market uncertainties. In its latest World Economic Outlook (WEO) for June, the fund retained the projected gross domestic product (GDP) rate for the Association of Southeast Asian Nations-5 (ASEAN) at 5.4 percent this year and 5.7 percent next year. Apart from the Philippines, the other ASEAN-5 member countries are Indonesia, Malaysia, Thailand and Vietnam. The IMF report, however, did not provide individual growth targets for the member countries. "Growth in most emerging and developing economies continues to be strong," IMF said. In its WEO in April, the IMF said Vietnam is expected to post the fastest GDP growth this year (6.3 percent), followed by Indonesia (6.2 percent), Malaysia (5.5 percent), Philippines (5 percent) and Thailand (4.5 percent). The multilateral lender, however, slashed its projections for world economic growth to 4.3 percent from 4.4 percent, but kept the 2012 growth forecast at 4.5 percent. The global economy grew by an annualized rate of 4.3 percent in the first quarter of the year, according to the fund. Temporary slowdown "Activity is slowing down temporarily, and downside risks have increased again," it said. "The global expansion remains unbalanced. Growth in many advanced economies is still weak, considering the depth of the recession. " For advanced economies, the IMF reduced its GDP growth projections to 2.2 percent from 2.4 percent this year, but maintained the projected 2.6 percent growth rate for next year. "For 2011, growth is expected to be weaker than previously projected in the US and Japan, partly offset by stronger activity in core euro area economies. In 2012, the rebound of the Japanese economy from the earthquake is forecast to offset weaker growth in the US," it said. The lender upgraded growth prospects for the euro area to 2 percent from 1.6 percent due to the strong performance of Germany and France. Japan's economy, on the other hand, is seen contracting by 0.7 percent this year from an earlier 2.8 percent forecast. But the future is bright for Japan next year. The IMF predicts its economy will grow by 2.9 percent from an earlier forecast of 2.1 percent. "But greater-than-anticipated weakness in US activity and renewed financial volatility from concerns about the depth of fiscal challenges in the euro area periphery pose greater downside risks," the IMF added. — JM/VS, GMA News