IMF cuts Philippine economic growth forecast to 5.4 percent for 2021

ABS-CBN News

Posted at Jun 16 2021 02:21 PM

IMF cuts Philippine economic growth forecast to 5.4 percent for 2021 1
Pedestrians cross a street in Marikina on March 2, 2021. George Calvelo, ABS-CBN News/File


MANILA - The International Monetary Fund on Wednesday trimmed its growth forecast for the Philippine economy for 2021 due to the slow recovery aggravated by a fresh wave of COVID-19 infections.

The economy could grow to 5.4 percent in 2021, lower than the previous projection of 6.9 percent, the IMF said in a virtual briefing. 

"The reasons for this is we see a bit of slowing in the recovery in the first half of 2021 before pick up in the second half of this year," IMF Division Chief for the Asia Pacific Department told reporters.

"The slowing in the recovery in the first half is mostly due to the second wave of the pandemic, which peaked in April, and which necessitated some stricter quarantine measures, and has also weighed on confidence. But now hopefully the second wave should be on the way out," he added.

The government imposed another lockdown last March 29 after a surge in confirmed daily COVID-19 infections. Restrictions have eased with the NCR Plus area under general community quarantine with varying restriction levels. 

The Asian Development Bank earlier cut its growth forecast to at least 4.5 percent while the World Bank said the economy could grow as much as 4.7 percent. 

The government target this year is 6 to 7 percent of growth, lower than the initial goal of 6.5 to 7.5 percent. 

For 2022, the multilateral lender is expecting the gross domestic product (GDP) to grow by 7 percent, higher than its initial projection of 6.5 percent. 

"Some of the strong rebound we expected from our previous forecast earlier has just been delayed," Helbling said.

He said the country's program was "appropriate" since it supports the health sector, enables vaccination and supports vulnerable households and businesses.

The GDP suffered its worst contraction of 9.6 percent in 2020 largely due to the negative impact of the COVID-19 pandemic. 

- With a report from Warren de Guzman, ABS-CBN News

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