AMRO upgraded its growth forecast just a month after its previous prediction of 4.7 percent in December 2019, thanks to the signing of a Phase One trade deal between the US and China following nearly two years of dispute.
In its report “ASEAN+3 Regional Economic Outlook 2020” released on January 17, AMRO said economic growth of ASEAN 4 (Indonesia, the Philippines, Malaysia and Thailand) and Vietnam will be at 5 percent, while that of China, Japan, the RoK is predicted at 6.1 percent, 0.5 percent, and 2.4 percent, respectively.
In the ASEAN bloc, highest growth will be seen in Myanmar (7.1 percent), Cambodia (7 percent) and Vietnam (6.9 percent).
AMRO also said that inflation rate of the ASEAN+3 region will be around 2.3 percent, with highest level projected for Myanmar (7.9 percent), Vietnam (3.3 percent), Indonesia and the Philippines (3 percent).
According to AMRO, the US-China trade dispute together with instability in the global policy making will affect market confidence and economic activities in the year. Although several nations are said to suffer a lot from the US-China tension, many others will benefit from the shift of trade and FDI flow.
AMRO also gave out several recommendations to prop up economic growth in the ASEAN+3, including loosening monetary policy in economies with low inflation rate, maintaining support policies for sustainable growth, and improving capacity of labour force and advanced technology.