Asia Regional Integration Center

The economy rebounded in 2021, growing by 5.6% on strong services and manufacturing, after a 4.3% contraction in 2020. On the supply side, strong manufacturing—construction materials, pharmaceuticals, furniture, and machinery—drove industrial production up by 7.2%. Services grew by 7.8% after a 3.5% decline in 2020—as reopened borders boosted tourism (up 34.2%), transport and warehousing (16.0%), and wholesale and retail trade (5.3%). On the demand side, private consumption grew by 3.7% as quarantine restrictions eased. Investment, however, fell by 8.2% due to cuts in public spending. The budget deficit dropped to 1.1% of GDP from 2.3% in 2020 as fiscal stimulus fell. Monetary policy remains focused on price stability. Bank lending grew by a robust 17.8%. As private consumption and hydrocarbon revenues are projected to weaken, GDP should grow by 3.7% in 2022 and 2.8% in 2023.