Asia Regional Integration Center

Border closures shut down tourism, causing the economy to contract by 5.9% in 2020, a reversal of the 5.3% growth in 2019. The economy is projected to contract further by 26.0% in 2021 with a gradual recovery toward the end of the year. The economy is forecast to grow by 6.0% in 2022. Inflation remained a low 0.7% in 2020, expected to rise to 1.0% in 2021 before reverting to 0.7% in 2022. The 2020 fiscal deficit of 28% of GDP is projected to rise to 33.1% in 2021 as spending increases despite a 45.2% decline in revenues. The deficit should taper to 11.2% by 2022. The current account also fell into deficit (6.0% of GDP in 2020) and is expected to fall further (12.5% in 2021). A tourism revival should bring the current account into surplus in 2022 (5.1%).