IMF cuts PH forecast, lowers global outlook
Credit to Author: ANNA LEAH E. GONZALES| Date: Tue, 09 Apr 2019 16:31:40 +0000
The International Monetary Fund (IMF) on Tuesday joined other multilateral institutions in lowering its 2019 Philippine growth forecast.
In its April 2019 World Economic Outlook (WEO), the Washington-based lender trimmed this year’s projection to 6.5 percent, from 6.6 percent previously, in line with lowered global growth expectations.
The revised forecast for the Philippines, however, is still higher than the 6.4 percent separately announced last week by the World Bank and the Asian Development Bank, which had tagged budget approval delays, an ongoing El Niño and a global economic slowdown for cutting their previous projections of 6.5 percent and 6.7 percent, respectively.
For 2020, the IMF expects Philippine economic growth to hit 6.6 percent.
The latest estimates were released along with new forecasts for global growth, which the IMF expects to moderate to 3.3 percent this year, from 3.6 percent in 2018, and then bounce back to 3.6 percent in 2020.
The 2019 and 2020 global growth projections are 0.4 and 0.1 percentage points lower than the previous estimates.
“The global growth forecast reflects a combination of waning cyclical forces and a return to tepid potential growth in advanced economies; a precarious recovery in emerging market and developing economies, driven to a great extent by economies currently experiencing severe macroeconomic distress; and complex factors that shape the prospects for potential growth in both groups,” the IMF said.
The projection for emerging and developing Asia was maintained at 6.3 percent for 2019. For 2020, growth is expected to hit 6.3 percent. Both figures are lower compared to the 6.4-percent expansion in 2018.
“Economic growth in China, despite fiscal stimulus and no further increase in tariffs from the United States relative to those in force as of September 2018, is projected to slow on an annualized basis in 2019 and 2020,” the IMF said.
“This reflects weaker underlying growth in 2018, especially in the second half, and the impact of lingering trade tensions with the United States,” it added.
China’s growth is expected to slow to 6.3 percent this year and 6.1 percent in 2020 from 6.6 percent in 2018.
The Asean 5, which includes the Philippines, Indonesia, Thailand, Malaysia and Vietnam, was forecast to grow by a slower 5.1 percent this year, down from 5.2 percent previously.
For 2020, the IMF expects Asean 5 growth of 5.2 percent.
Philippine economic growth hit 6.2 percent last year, dropping from 6.7 percent in 2017 and missing the government’s downwardly-revised 6.5-6.9 percent target, as surging inflation dampened consumer spending.
Last month, economic managers lowered their 2019 and 2020 growth targets to 6.0-7.0 percent and 6.7-7.5 percent, from 7.0-8.0 percent previously, citing Congress’ failure to pass this year’s budget, droughts and dry spells caused by El Niño, and the US-China trade war.
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