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The Asian Development Bank (ADB) on Thursday further lowered its growth projection for the Philippine economy this year as the country continues to fight to contain the 2019 coronavirus disease (Covid-19) pandemic, making it difficult to Recovery.
In its 2020 Asian Development Outlook Update supplement, the Manila-based multilateral lender said it lowered its 2020 forecast for Philippine gross domestic product (GDP) to -8.5 percent from -7.3 percent previously, as ” household consumption and investment have waited. “
The latest outlook is a GDP growth reversal of 6.0 percent from 2019, but it falls on the lower end of the government’s current growth estimate of -8.5 to -9.5 percent.
It is worse than -8.1 percent from the World Bank, -8.3 percent from the International Monetary Fund and -7 percent from Moody’s Investors Service, but better than -9.6 percent from Fitch Ratings and -9.5 percent from S&P Global Ratings.
These revised projections came after the Philippines remained in recession after domestic production fell 11.5 percent in the third quarter, 16.9 percent in the second, and 0.7 percent in the first. This brought the GDP contraction to 10 percent in the first nine months.
That the “Philippine economy contracted 10 percent between January and September 2020 [showed] quiet activity and confidence from consumers and businesses [amid] the pandemic, ”said the ADB.
Household consumption fell 9.3 percent in the third quarter, while fixed investments fell 37.1 percent.
Despite its lower projection, the ADB expects the economy to recover in 2021 and grow 6.5 percent, assuming public investments pick up and the global economy picks up.
For Southeast Asia, the ADB also cut its GDP forecast to -4.4 percent in 2020 from -3.8 percent previously, noting that it “remains under pressure as the Covid-19 outbreaks continue and containment measures, particularly in Indonesia, Malaysia and the Philippines. ” . “
It also raised its Philippine headline inflation forecast to 2.5 percent this year from 2.4 percent previously, and expects it to rebound to 2.6 percent in 2021.
Consumer price growth accelerated to a 20-month high of 3.3 percent in November due to higher prices for food and non-alcoholic beverages.
The figure was faster than the 2.5 percent and 1.3 percent in October a year ago. So far this year, it averaged 2.6 percent, falling within Bangko Sentral ng Pilipinas’ 2-4 percent target range for 2020.
ADB’s annual flagship economic publication, Asian Development Outlook, is published each April. Its updates are published in September and short supplements in July and December.
WITH A REPORT FROM MAYVELIN U. CARABALLO
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