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By Luz Wendy T. Noble, Reporter
The Philippines is likely to see a slower pace of recovery this year, as the International Monetary Fund (IMF) and a group of United Nations (UN) experts cut their growth forecasts amid uncertainty over the launch of the vaccine and continuous restriction measures.
The IMF cut its gross domestic product (GDP) forecast for the Philippines to 6.6% this year, from the initial forecast of 7.4% given in October. The economy is expected to grow 6.5% in 2022.
“The projected rebound for 2021 and 2022 is mainly driven by a renewed investment momentum in infrastructure and a gradual recovery in the private sector, supported by an accommodative monetary policy and a global recovery,” said IMF representative to the Philippines Yongzheng Yang, in an email to Business world.
The IMF’s GDP estimate for 2021 is within the government’s growth target of 6.5% to 7.5%, while the projection for 2022 is less optimistic than the 8-10% estimate given by economic administrators.
Yang identified several negative risks to growth prospects, including ongoing lockdown restrictions and uncertainty about the government’s COVID-19 vaccination program.
“We expect social distancing and some forms of restrictions to persist this year,” he said, despite noting that the country has already seen “constant Floridaattenuation of the infection curve ”since September last year.
The Health department reported 1,173 new COVID-19 infections on Tuesday, bringing the total to 516,166, with active cases at 30,357.
“As in most other countries, vaccination is a gradual process and progress is subject to uncertainty,” he said.
The government aims to start immunization next month, aiming to inoculate 70 million people in the year.
This year, the IMF’s Mr. Yang said headline inflation in the Philippines may average 3.1%, which is slower than the 3.2% forecast by the Bangko Sentral ng Pilipinas, but faster than 2.6 % in 2020. His forecast of 3% inFloridaAction in 2022 is faster than the central bank’s 2.9% projection.
The IMF said the ASEAN-5 economies, which comprise Indonesia, Malaysia, the Philippines, Thailand and Vietnam, are projected to grow 5.2% this year, slower than the previous forecast of 6.2%. On the other hand, the estimate for 2022 was revised up from 5.7% to 6%.
“The strength of the recovery is projected to vary significantly between countries, depending on access to medical interventions, the effectiveness of policy support, exposure to cross-country contagion effects, and the structural characteristics entering the crisis,” he said. the IMF.
WEAK GROWTH
At the same time, the UN Department of Economic and Social Affairs (DESA) said it expects the Philippines to grow 6.2% this year, down from its previous forecast of 6.3%.
This after the Philippines likely experienced the worst contraction in Southeast Asia in 2020 due to the pandemic.
In its World Economic Outlook 2021 report released on Tuesday, UN DESA said that Philippine GDP likely declined by 8.8% last year, a reversal of the 6.2% growth forecast it gave in January. 2020.
Official GDP data will be released on Thursday. A Business world The survey showed an average contraction of 9.5% for all of 2020.
“While Singapore, Thailand and Vietnam FloridaEven though the curve has been relatively fast and with shorter lockdowns, Indonesia, Myanmar and the Philippines are still struggling with daily high levels of new infections. In the latter group, a longer period of limited mobility and weak sentiments will depress consumer spending and private investment, thus restricting the pace of recovery, ”he said.
This year, all economies in Southeast Asia are expected to register growth, led by Vietnam (7.8%), followed by Malaysia (6.6%), Myanmar (6.5%) and the Philippines.
The UN DESA said the likely 8.8% contraction of the Philippines GDP was the worst economic performance among the 11 Southeast Asian economies in 2020.
The Philippines lagged behind Thailand (-6.6%), Singapore and Timor Leste (-6.5%), Malaysia (-4.8%), Indonesia (-1.6%) and Cambodia (-1.4 %). Four countries are likely to have expanded last year, namely Vietnam (3.4%), Myanmar (2.3%), Brunei (1.2%) and Laos (0.5%).
The UN DESA expects headline inflation to decline to an average of 2.1% this year from 2.6% in 2020, and rebound to 2.8% in 2022.
GLOBAL RECOVERY
In its World Economic Outlook Update released Tuesday, the IMF said global economic activity will remain below pre-pandemic levels this year, even as the recovery kicks in.
For this year, the IMF said the world economy will grow 5.5%, faster than the previous estimate of 5.2%. The growth forecast for 2022 remains at 4.2%.
“Much remains to be done on the health and economic policy fronts to limit the lingering damage from the severe 2020 downturn and ensure a sustained recovery,” he said. – with Beatrice M. Laforga
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