Asia Regional Integration Center

Economic growth dropped to 5.3% in FY2019 from 8.9% in FY2018, largely from a 20% fall in public spending on infrastructure. However, services, mainly tourism and retail services, continued to grow, contributing 4.1 percentage points to GDP growth. Inflation rose to 0.8% due to high import demand in support of tourism. The fiscal surplus expanded as revenue rose while government infrastructure spending declined. Net debt at end-June 2019 was below target at 17.3% of GDP. The current account remained in surplus as tourism receipts outpaced the rise in imports. With the collapse in tourism as the COVID-19 outbreak intensified, economic activity will contract by 2.2% in 2020. Growth in FY2021 is projected at 1.0% as the government continues to implement its economic recovery plan.