Atin Ito First Filipino Community Newspaper in Ontario
The International Monetary Fund (IMF) has raised its Philippine growth forecast to 6.2 percent for 2024 from its previous estimate of six percent announced last January, citing carryover strength from the last quarter of 2023.
The IMF also expects the country’s gross domestic product (GDP) to grow by 6.2 percent in 2025, higher than its January forecast of 6.1 percent.
Based on the April IMF World Economic Outlook (WEO) report released Tuesday, April 16 (Washington time), the IMF also projects Philippine inflation will fall to below four percent this year and in 2025. Its projected year-end inflation is 3.6 percent for 2024 and three percent for 2025 which is within the government target of two percent to four percent.
Meanwhile, the 6.2 percent IMF GDP outlook for 2024 is within the Marcos administration’s growth target of six percent to seven percent but the 2025 projection is below the government target of 6.5 percent to 7.5 percent.
IMF’s Resident Representative in the Philippines Ragnar Gudmundsson said in an email that real GDP growth for 2024 was revised slightly to 6.2 percent from six percent in the January WEO because of “carryover from a better-than-expected outturn in the last quarter of 2023.” The local economy grew by 5.6 percent in the fourth quarter 2023, bringing the full-year GDP to 5.6 percent.
As to the 2025 growth outlook, Gudmundsson said the 6.2 percent GDP expansion next year will be “supported by an acceleration in domestic demand and investment.”
“Over the medium term, structural reforms to close infrastructure and education gaps, attract greater FDI (foreign direct investments), and harness benefits from the digital economy should help realize a growth potential of about 6-6.5 percent. These reforms should be complemented by strengthening existing social protection schemes and addressing climate change through a more integrated strategy that includes a carbon pricing scheme,” he said.
Gudmundsson said the 6.2 percent GDP forecast for the Philippines “compares with an average growth rate for ASEAN countries in 2024 of 4.6 percent.”
Based on the latest WEO, the IMF forecast the Asian regional economy will grow by 4.5 percent this year and 4.3 percent in 2025.
Advanced Asia which includes Japan, Korea, Australia, Taiwan, Singapore, Hong Kong, New Zealand and Macao is projected to grow by 1.7 percent this year and 1.8 percent in 2025.
Emerging and developing Asia which includes the Philippines, China, India, Malaysia, Indonesia, Thailand and Vietnam is expected to grow its combined GDP by 5.2 percent this year and 4.9 percent in 2025.
The IMF forecasts global growth in 2024 and 2025 to perform at the same pace as in 2023. The projection for 2024 and 2025 is 3.2 percent growth, the same as last year.
“The projection for global growth in 2024 and 2025 is below the historical (2000–19) annual average of 3.8 percent, reflecting restrictive monetary policies and withdrawal of fiscal support, as well as low underlying productivity growth,” said the IMF.
In a Dec. 15, 2023 report, upon the conclusion of the 2023 Article IV Consultation with the country’s economic authorities, the IMF said the local economy has the potential to grow between six percent to 6.5 percent over the medium term, backed by infrastructure development, foreign investments and private sector funding. — Lee C. Chipongian
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Credit belongs to: www.mb.com.ph
