Asia Regional Integration Center

Economic growth is estimated to have fallen to 0.7% in 2019 from 3.5% in 2018. Slower growth among major trading partner economies cut growth in visitor arrivals to 2.8%, the lowest since 2013. Growth in tourism earnings slowed to 2.7% from 4.5% in 2018. A tighter government budget and slower growth in private sector credit also contributed to the GDP growth slowdown. Sugarcane production accelerated to 6.5% in 2019 from 4.0% in 2018 and sugar production grew by 5.3%, reversing the 11.2% decline in 2018. The fiscal deficit narrowed to 3.4% of GDP while monetary policy remained accommodative in response to weak demand. GDP is projected to contract by 4.9% in 2020 as the COVID-19 pandemic continues to ban most travel. Investment in climate resilient infrastructure, limits on debt exposure and building fiscal buffers could help growth recover to 3.0% in 2021.