Philippines budget deadlock, Indonesia election

Economic growth in the Philippines is likely to slow unless the 2019 budget is approved soon, but the cuts the government has announced to its GDP growth forecast for this year look too severe. We think the growth forecasts have been revised partly for political purposes and are intended to persuade lawmakers to approve the budget. It also gives the administration an excuse to back away from its 7-8% growth target, which always looked too optimistic given the worsening external environment. Meanwhile, with just over a month to go before polling day on 17^th April, the result of Indonesia’s general election is increasingly looking like a foregone conclusion, with President Joko Widodo well ahead of his rival, Prabowo Subianto, in the opinion polls. While neither candidate has unveiled policies that are likely to address the long-standing constraints which are holding back growth, another term for Jokowi would pose fewer risks to the economy.