The International Monetary Fund raised on Tuesday the 2022 gross domestic product growth projection for the Philippines to 6.7 percent from the 6.5-percent initial estimate it made in April on the back of robust recovery in the early part of the year.
“Our GDP projection for 2022 has been revised upwards to 6.7 percent for 2022, reflecting the strong recovery momentum in the first half of the year and real GDP returning to its pre-pandemic level,” IMF resident representative to the Philippines Ragnar Gudmundsson told Manila Standard in an emailed response to a question in relation to the release of the World Economic Outlook for July 2022.
The economy grew 8.3 percent in the first quarter, prompting economists to believe that the second-quarter expansion might be also robust.
Gudmundsson said the growth momentum would likely moderate in the second half and in 2023 in the absence of high base effects, the impact of the war in Ukraine, slowdown in major trading partners, faster US monetary policy tightening and high inflation.
The growth estimate for 2023 was reduced to 5 percent from 6.3 percent.
“GDP growth for 2023 has correspondingly been revised to about 5 percent, with the medium-term growth forecast returning to its pre-COVID 19 trend of 6.5 percent by 2024,” Gudmundsson said.
The interagency Development and Budget Coordination Committee reduced on July 8 its GDP growth projection this year to a range of 6.5 percent to 7.5 percent from 7 percent to 8 percent previously, taking into account the domestic and external headwinds that may impact the economy.
The economy grew by 5.7 percent in 2021, a turnaround from the 9.6-percent contraction in 2020.
The latest WEO report said the tentative recovery in 2021 was followed by increasingly gloomy developments in 2022 as risks began to materialize.
“Global output contracted in the second quarter of this year, owing to downturns in China and Russia, while US consumer spending undershot expectations. Several shocks have hit a world economy already weakened by the pandemic: higher-than-expected inflation worldwide––especially in the United States and major European economies––triggering tighter financial conditions; a worse-than-anticipated slowdown in China, reflecting COVID- 19 outbreaks and lockdowns; and further negative spillovers from the war in Ukraine,” it said.
“The baseline forecast is for growth to slow from 6.1 percent last year to 3.2 percent in 2022, 0.4 percentage point lower than in the April 2022 World Economic Outlook,” it said.
