Asia Regional Integration Center

GDP growth edged up to 5.2% in the first half 2018 from 5.0% in the same period of last year (Figure 3.4.4). Within the first half of the year, growth improved from 5.1% in the first quarter to 5.3% in the second, partly reflecting a spike in domestic demand in June as Eid al-Fitr celebrations, marking the end of Ramadan, were earlier than in the previous year. By sector, a slowdown in agriculture was more than offset by higher growth in industry and services. A delayed harvest slowed agriculture growth to 4.1% in the first half of the year from 5.1% in the same period of 2017. Growth in manufacturing picked up to 4.3% in the first 6 months of 2018 from 3.9% a year earlier. Helped by buoyancy in exports as well as in domestic demand, services expanded by 5.9% and generated almost half of GDP growth.

While export growth may moderate, domestic demand should hold up, even with continued monetary tightening to mitigate pressure on the balance of payments. Accordingly, GDP growth is forecast at a robust 5.2% this year, up from 5.1% in 2017. Growth is expected to edge up to 5.3% in 2019.