Asia Regional Integration Center

Growth accelerated to 8.3% in the first half of 2018 from 6.9% in the same period of 2017, reflecting higher demand. Industry excluding construction expanded by 6.8% with strong growth in machinery, food, beverages, pharmaceuticals, textiles, basic metals, and mineral products. Construction grew by 8.8%, reflecting higher investment. Services rose by 9.5% with gains in all subsectors, while agriculture grew by 5.7% following a 5.3% decline in 2017.

On the demand side, private consumption grew by 4.4% in the first half of 2018 on higher consumer lending, moderate inflation, and positive consumer sentiment. Fiscal consolidation cut public consumption by 9.1%. Total investment increased by 76%, reflecting a sharp rise in inventories, increased government capital spending, and higher private and foreign direct investment. Net exports declined as imports outgrew exports. With these developments, this Update raises GDP growth projections for both 2018 and 2019.