ADB’s 2024 outlook maintained at 6%

The Asian Development Bank (ADB) maintained its growth outlook at 6 percent for the country this year and 6.2 percent next year, seeing Trump’s economic policies having a limited effect.

“Strong overall domestic demand and exports continue to drive economic expansion in our region,” ADB chief economist Albert Park said in the ADB’s Asian Development Outlook report released Wednesday.

The multinational institution expects Philippine inflation to settle at 3.3 percent on average this year and 3.2 percent next year, supporting robust domestic consumption of households and businesses.

Both projections fall within the Development Budget Coordination Committee’s outlook of 3.1 to 3.3 percent for this year and 2 to 4 percent for the next.

“However, the policies expected to be implemented by the new US administration could slow growth and boost inflation to some extent in the People’s Republic of China, most likely after next year, also impacting other economies in Asia and the Pacific,” Park said.

Tariff barrage

Incoming reelected US President Donald Trump promised to impose at the least, 10 percent additional tariff on all imported goods and even up to 60 percent on Chinese products which economists said businesses will pass to consumers.

Economists added Trump’s anti-immigrant policies could increase labor costs in the US.

However, Park said these policies provide Asian developing countries opportunities to diversify trade partnerships beyond the US and China in sustaining or growing export incomes.

Under a high-risk scenario stemming from Trump’s protectionist policies which he sees to boost American production, ADB said global economic growth could decline by 0.5 percentage points over the next four years.

“Impacts could be seen sooner if the policies are implemented earlier and more rapidly than expected, or if US-based companies front-load imports to avoid potential tariffs,” the ADB outlook report said.

ABD expects overall economic growth in developing Asia and the Pacific to hit 4.9 percent this year 2024, slightly below its estimate of 5 percent in September.

For Southeast Asia, ADB projects an overall higher growth at 4.7 percent this year from 4.5 percent due to stronger manufacturing exports and government spending. The 2025 forecast remains at 4.7 percent.