Asia Regional Integration Center

GDP growth in 2017 came in at 6.8%, slightly lower than the 7.0% in 2016. By sector, a slowdown in industry was offset by acceleration in services, while growth in agriculture was unchanged from 2016. Despite a hefty 24.8% rise in electricity generation, industry growth slowed from 12.0% in 2016 to 9.5% in 2017, as persistently subdued global mineral prices dragged down mining and metal production. Meanwhile, growth in services accelerated from 4.7% in 2016 to 6.2% in 2017 as growth in wholesale and retail trade, and in information and communications, more than offset a slowdown in tourism business.

Growth is expected to be sustained at 6.8% in 2018, as the industry slowdown persists but is compensated by slightly higher growth in services. Growth will pick up to 7.0% in 2019. External risks to the outlook would include an unexpectedly large slowdown in trade and heightened instability in financial markets, either globally or within the region. A bigger risk could stem from domestic conditions if government efforts to consolidate its finances continue to falter, threatening debt distress even as foreign exchange reserves barely cover normal imports.