Growth for the Association of Southeast Asia Nations (ASEAN) economic community, which includes the Philippines, as well as the +3 nations, namely China; Hong Kong, China; Japan; and Korea, this year was estimated at 4.2 percent.

The forecast was downgraded from 4.4 percent in the July 2024 review, the ASEAN+3 Macroeconomic Research Office (AMRO) report said on Thursday.

Based on the ASEAN+3 Regional Economic Outlook (AREO), the ASEAN+3 region will grow at 4.2 percent in 2024 and improve to 4.4 percent in 2025, attributed to key growth drivers namely the continued recovery in external trade and tourism, alongside resilient domestic demand.

On the other hand, the report said the Plus-3 economies are projected to grow at 4.1 percent, while ASEAN is expected to expand by 4.7 percent in 2024.

According to AMRO, it expects the ASEAN+3 region growth to strengthen to 4.4 percent in 2025, aligning with expectations of stable external demand and resilient domestic demand amid easier financial conditions.

Upbeat outlook

In its outlook for the Philippines, AMRO expects the country’s economy to grow 6.1 percent this year, higher than the forecast for China (5 percent from 5.3 percent), Hong Kong (3.3 percent from 3.5 percent), Indonesia (5.1 percent from 5.2 percent), but not with Vietnam from 6.2 percent from 6.3 percent.

“Recent developments have shifted the risk landscape for the ASEAN+3 region,” said AMRO Chief Economist Hoe Ee Khor.

“The sharp but short-lived market adjustments that we witnessed in early August are a reminder of the risk of further spikes in financial market volatility. The potential escalation of protectionist policies following the US presidential election is another key risk for the region.”

Meanwhile, inflation in the ASEAN+3 region — excluding Lao PDR and Myanmar — is forecast to moderate to 1.9 percent in 2024, slightly lower than the July forecast of 2.1 percent.

Overall, inflationary pressure remains well contained in the region, in line with the expectation of easing global inflation.

Recent US economic indicators have sparked some concerns for the region.

Continued weakness in the US labor market and purchasing managers index (PMI) figures have raised fears of a sharper growth slowdown, potentially impacting regional exports, the report said.

Moreover, the November election outcome could also significantly affect the region’s economic outlook, particularly if it signals an intensification of the United States-China trade tensions or broader trade frictions.

“An increasing number of central banks worldwide have begun easing monetary policy, and China has recently announced a broad set of stimulus measures to support its economy. These actions will have positive spillover effects on the rest of the region,” Dr. Khor said.

“However, rising external and geopolitical uncertainties underscore the need to continue strengthening resilience and enhancing cooperation in the region,” he added.

Earlier, Finance Secretary Ralph Recto pegged September’s inflation rate hitting 2.5 percent, tamer than the 3.3 percent August rate.

Recto also said the Bangko Sentral ng Pilipinas’ Monetary Board, on which he sits as chairperson, can afford to slash interest rates further to 50 percent, equaling the size of the US Federal Reserve’s rate cut.