The International Monetary Fund on Tuesday slashed its 2019 growth forecast for the Philippines to 5.7 percent from the previous estimate of 6 percent following the slower economic expansion in the first half coupled with the worsening global environment.
It said, however, in its October World Economic Outlook the Philippines would continue to outperform most of its peers in the ASEAN region.
“Since our last update, the second-quarter GDP growth has turned out to be lower than expected. The latest WEO forecast takes into account this growth outcome and the worsening external environment,” IMF resident representative to the Philippines Yongzheng Yang said in a reply to a query.
The 5.7-percent estimate is below the government’s earlier target range of 6 percent to 7 percent for 2019. Despite this, the Philippines will continue to outpace the 4.5-percent estimate for Malaysia, 2.9 percent for Thailand and 5 percent for Indonesia.
Vietnam is estimated to grow faster than the Philippines this year at 6.5 percent.
For 2020, the IMF expects the Philippines to grow by 6.2 percent, next to Vietnam’s 6.5 percent, but faster compared to 4.4 percent for Malaysia, 3 percent for Thailand and 5.1 percent for Indonesia.
Economic growth in the second quarter slowed to a four-year low of 5.5 percent from 6.2 percent a year ago, weighed down by the El Niño dry spell, rising protectionism in advanced economies, delay in the approval of the national budget for 2019 and the ban on construction activities in the run-up to the midterm elections last May.
The Philippine Statistics Authority reported that the sluggish and slower-than-expected expansion for the April-to-June period was the slowest since the 5.1-percent GDP expansion in the first quarter of
2015. It also marked the second successive quarter that economic growth stayed below 6 percent.
This brought the first-half GDP growth to just 5.5 percent, below the low end of the target range.
