THE RECOVERY is expected to be U-shaped, with output returning to pre-crisis levels in two years, with household spending remaining subdued and the coronavirus outbreak still uncontained, Sun Life Asset Management Co., Inc. said.

In a briefing Wednesday, Michael Gerard D. Enriquez, chief investment officer at Sun Life Asset Management, downgraded the house’s gross domestic product (GDP) growth forecast for this year to 5.5% from 8.6% previously, citing the expected slower recovery across all sectors.

The latest estimate was lower than the government’s already-reduced growth target of 6-7%.

Mr. Enriquez said the economy will likely take two years to return to trendline growth. In the worst-case scenario, the economy will grow 3.9% in 2021 following the record slump of 9.6% in 2020, with the optimistic case contemplating a GDP rise of expand 7.1%.

“We now expect an extended U-shaped type of recovery for GDP. We now think 2021 is a recovery year but not as strong as earlier predicted due to uncertainty over the fiscal stimulus and prolonged delays in vaccine rollout,” Mr. Enriquez said.

Sun Life Asset Management said high growth is possible this quarter but the rate of expansion will ease over the rest of the year. It projected a 12.5% rise in the second quarter due to base effects, a rise of 8.3% in the third quarter and growth of 5% in the fourth quarter.

He said Sun Life Asset Management tempered its expectations for all sectors this year. The house view is now 1-3.5% growth for household consumption in 2021, against the previous growth estimate of 3-4%. It also lowered its projections for government spending growth to 15-25% from 20-30% previously, as well as its estimate for private investment to 10-12% from 20-25%.

Exports are expected to rise 4-7% this year from the estimated 5-8% growth seen previously, while imports could grow by 6-10%, compared with the previous 7-12% forecast. — Beatrice M. Laforga