ADB trims PH growth forecast to 6.2% in 2019
Credit to Author: ANNA LEAH E. GONZALES| Date: Thu, 18 Jul 2019 16:16:40 +0000
THE Asian Development Bank (ADB) on Thursday revised downward its 2019 Philippine economic growth forecast to 6.2 from 6.4 percent, even as it sees inflation easing this year.
In its Asian Development Outlook Supplement report, the Manila-based multilateral bank said it lowered the projection on account of the delayed approval of this year’s national budget.
Economic growth forecast for 2020, however, was retained at 6.4 percent.
“Growth moderated in the Philippines from 6.3 percent year-on-year in [the] Q4 (fourth quarter) of 2018 to 5.6 percent in [the] Q1 (first quarter) of this year, as the delayed passage of the national budget held back government spending,” the ADB said.
“Public construction contracted by 8.6 percent, while growth in government consumption eased from 12.6 percent year-on-year in Q4 of 2018 to 7.4 percent in Q1 of 2019. Growth in exports of goods and services also slowed as a result of lackluster global trade and economic activity and the downturn in the electronics cycle,” it added.
According to the report, public investment is expected to rebound in the second half after the budget was approved in mid-April.
Public investment, ADB said, will also pick up next year as more infrastructure projects come onstream.
“Slowing inflation, low unemployment and steady remittances will continue to support household consumption,” it added.
Lower rice prices would pull down the inflation rate this year, according to the lender.
“Rice prices have declined on improved supply since the lifting of quantitative restrictions on rice imports in February 2019. Reflecting lower food prices, the Philippine inflation forecast for 2019 is thus revised [downward] from 3.8 percent to 3.0 percent,” it said.
Inflation forecast for next year was retained at 3.5 percent.
The Philippine Statistics Authority (PSA) earlier reported that the rate of the increase in the prices of goods and services eased to 2.7 percent in June from 3.2 percent in May. The latest figure is the lowest recorded since August 2017’s 2.6 percent.
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