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AMRO's July forecast leaves GDP growth unchanged

Released at: 14:23, 23/07/2019

AMRO's July forecast leaves GDP growth unchanged

Photo: Viet Tuan

ASEAN+3 Macroeconomic Research Office (AMRO) releases Monthly Update of the ASEAN+3 Regional Economic Outlook - July 2019.

by Doanh Doanh

The ASEAN+3 Macroeconomic Research Office (AMRO) has released its Monthly Update of the ASEAN+3 Regional Economic Outlook - July 2019. Vietnam’s GDP growth is forecast at 6.6 per cent for 2019 and 6.7 per cent for 2020; unchanged from its May projection.

AMRO staff revised baseline forecasts downward, following continued weakness in manufacturing and export outturns. The region’s export value continued to contract in May, with the exception of Vietnam and the Philippines. Vietnam’s strong performance in the processing and manufacturing sectors helped drive its robust second quarter GDP growth of 6.7 per cent year-on-year. However, the imposition of US tariffs on Vietnam’s steel could exert near-term pressure on its exports

Investor sentiment improved as global stock markets rallied and volatility receded following the easing in US-China trade tensions, and was supported by the accommodative tone of major central banks. The latest Euro Area data points to continuing weakness in its economic performance, while in the UK, fears of a second quarter recession mounted following a sharp downturn in private sector activity amid Brexit stagnation.

Despite the weakening economic outlook, foreign portfolio capital flows to regional emerging markets (EMs) spiked in June, driven mainly by bond inflows. Regional EM currencies traded mostly weaker against the USD, while long-term borrowing costs in regional EMs continued to be supported by easy global monetary conditions, tracking US Treasuries closely.

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