Economic growth accelerated from 6.8% in 2017 to +7.1% in 2018 - its highest pace since the 2008-09 - driven by a solid rise in exports, an increase in investment and a robust growth in private consumption.

Looking ahead, we expect economic growth to slow but to remain fairly resilient at +6.5% and +6.4% respectively in 2019 and 2020. Slower growth in global trade, tighter credit conditions and fiscal consolidation will be the reasons behind the deceleration. In the longer term, the economy is expected to remain a strong growth performer of the region helped by: a strong growth in foreign direct investment; a solid demand growth from Asian markets; its strong competitive advantages (low labor costs, high productivity growth and its strategic location); its increasing integration in global supply chains and its positioning as a global manufacturing hub. The country is seen as one of the few “beneficiaries” of current China-US trade feud as corporates producing in China look for new production hubs.

The country is ranked 69th in the last Doing Business survey (2019 Ease of Doing Business survey), 13 ranks above the 2017 edition reflecting an improvement in Tax payments and Getting electricity sub-components. Starting a Business and Insolvency Resolution sub-components continue to be a problem.

The long-term outlook is broadly positive as infrastructure and business practices are set to improve. Authorities are expected to increase infrastructure spending to preserve exports performance. Moreover, strategic trade partnerships are set to accelerate the integration of the economy in global supply chains but also improve business practices. On top of boosting exports, we expect partnerships such as the ASEAN economic community, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership or the upcoming Regional Comprehensive Economic Partnership (China, India, Australia, New Zealand, South Korea, Japan, and ASEAN) to help improve business practices in the country.