Philippine growth forecast slightly cut by IMF

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Manila constructionThe Philippines will lead growth in Southeast Asia through next year, the International Monetary Fund (IMF) said on October 8.

In its latest World Economic Outlook, the IMF said Philippines gross domestic product (GDP) is projected to grow by 6.8 per cent in 2013 and by six per cent in 2014. The forecast for this year is lower than the seven per cent announced last July, while that for next year is unchanged.

Despite the cut for this year, the forecast for the Philippines is higher than that for Indonesia (5.2 per cent this year and 5.5 per cent next year), Vietnam (5.4 per cent next year from 5.3 per cent this year), Malaysia (4.7 per cent this year and 4.9 per cent next year), Thailand (3.1 per cent this year and 5.2 per cent next year).

“Consistent with the moderate pickup in growth and a stable outlook for global commodity prices, inflation is expected to remain generally within  central banks’ comfort zones. In the ASEAN economies, solid domestic demand should support growth, particularly in Malaysia and the Philippines,” IMF said.

For the Philippines, inflation would remain benign at 3.5 per cent next year from 2.8 per cent this year, the IMF said.

In Asia, growth is expected to remain solid in the second half of this year and next year amid a projected moderate global recovery and still supportive financial and monetary conditions in many economies and exchange rate depreciations that have dampened the impact of recent asset price corrections.

The IMF sees Asia growing 5.25 per cent in 2013 and in 2014, down from the 5.75 per cent and six per cent forecasts made earlier. Risks to growth in the region are tilted to the downside.

“A major downside risk is a synchronized global slowdown, which would take a heavy toll on the region’s export-dependent economies,” the IMF said.

Another risk is that capital outflows could intensify due to a further tightening in US monetary conditions or deteriorating domestic fundamentals. This could lead to further declines in domestic asset prices, tighter overall financial conditions and, ultimately, slower growth, especially in economies with weaker fundamentals and less policy space. The IMF also cited a persistent deceleration in investment activity because of structural weaknesses.

 

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Reading Time: 2 minutes

The Philippines will lead growth in Southeast Asia through next year, the International Monetary Fund (IMF) said on October 8.

Reading Time: 2 minutes

Manila constructionThe Philippines will lead growth in Southeast Asia through next year, the International Monetary Fund (IMF) said on October 8.

In its latest World Economic Outlook, the IMF said Philippines gross domestic product (GDP) is projected to grow by 6.8 per cent in 2013 and by six per cent in 2014. The forecast for this year is lower than the seven per cent announced last July, while that for next year is unchanged.

Despite the cut for this year, the forecast for the Philippines is higher than that for Indonesia (5.2 per cent this year and 5.5 per cent next year), Vietnam (5.4 per cent next year from 5.3 per cent this year), Malaysia (4.7 per cent this year and 4.9 per cent next year), Thailand (3.1 per cent this year and 5.2 per cent next year).

“Consistent with the moderate pickup in growth and a stable outlook for global commodity prices, inflation is expected to remain generally within  central banks’ comfort zones. In the ASEAN economies, solid domestic demand should support growth, particularly in Malaysia and the Philippines,” IMF said.

For the Philippines, inflation would remain benign at 3.5 per cent next year from 2.8 per cent this year, the IMF said.

In Asia, growth is expected to remain solid in the second half of this year and next year amid a projected moderate global recovery and still supportive financial and monetary conditions in many economies and exchange rate depreciations that have dampened the impact of recent asset price corrections.

The IMF sees Asia growing 5.25 per cent in 2013 and in 2014, down from the 5.75 per cent and six per cent forecasts made earlier. Risks to growth in the region are tilted to the downside.

“A major downside risk is a synchronized global slowdown, which would take a heavy toll on the region’s export-dependent economies,” the IMF said.

Another risk is that capital outflows could intensify due to a further tightening in US monetary conditions or deteriorating domestic fundamentals. This could lead to further declines in domestic asset prices, tighter overall financial conditions and, ultimately, slower growth, especially in economies with weaker fundamentals and less policy space. The IMF also cited a persistent deceleration in investment activity because of structural weaknesses.

 

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