THE International Monetary Fund (IMF) maintained its growth forecast for the Philippines for this year, despite lowering global growth projections.
“The Philippines continues to be one of top performers in economic growth in the region. The IMF’s growth forecast for the Philippines remains unchanged at 5.7% in 2019,” IMF resident representative to the Philippines Yongzheng Yang said in an e-mail to BusinessWorld.
“We think growth will pick up to 6.3% this year, supported by strong domestic demand, including the continued scaling up of public investment and robust consumption,” he added.
If realized, the 2019 and 2020 growth projections of IMF are short of the government’s 6-6.5% growth target for 2019 and the 6.5-7.5% target for 2020 and 2021.
In its World Economic Outlook (WEO) Update released on Monday, the IMF estimated global growth to jump from an estimated 2.9% last year to 3.3% in 2020, and to 3.4% for 2021. The projections for 2020 and 2021 are 0.1 percentage point and 0.2 percentage points lower than those in the October WEO.
Sought for comment about IMF’s growth forecast for the country, UnionBank of the Philippines, Inc., Chief Economist Ruben Carlo O. Asuncion said: “IMF has maintained its forecasts for the Philippines because they see that the country has undertaken what has been needed for the economy to expand consistently, i.e., the investment in infrastructure development and socio-economic services.”
At the same time, the IMF downgraded its growth forecast for ASEAN-5, comprised of Philippines, Malaysia, Indonesia, Thailand, and Vietnam, to 4.8% in 2020 and 5.1% in 2021. Both projections are 0.1 percentage point lower than the WEO forecast in October.
“After slowing to 4.7% in 2019, growth in ASEAN-5 countries is projected to remain stable in 2020 before picking up in 2021,” IMF said. “Growth prospects have been revised down slightly for Indonesia and Thailand, where continued weakness in exports is also weighing on domestic demand.”
Mr. Asuncion said the IMF may have reiterated that “global growth prospects is seemingly recovering but tentative and sluggish with no evident turning point yet.”
“This may probably have been the basis for the ASEAN-5 assumption that is largely composed of trade-based economies,” he added.
The Philippine Statistics Authority is set to report the fourth-quarter gross domestic product (GDP) growth on Thursday. Average growth in the first three quarters was at 5.8% after the 6.2% pace logged in the third quarter. — Luz Wendy T. Noble