THE International Monetary Fund (IMF) forecasted a strong recovery for the Philippines for this year and sustained growth through 2022.
In its latest World Economic Outlook (WEO), the global monetary authority said the Philippines is likely to grow by 6.9 percent for this year, up from the contraction of 9.5 percent in 2020.
The new forecast is an upward revision from the 6.6-percent IMF forecast for the Philippinesâs 2021 gross domestic product (GDP) growth.
For next year, the IMF kept its 6.5-percent projection for the countryâs growth.
Based on the latest WEO projections, the IMF sees the Philippines leading the growth among the five major economies in Southeast Asia (Asean-5).
Following the Philippinesâ 6.9-percent projection is Vietnam and Malaysia, which are both projected to grow at 6.5 percent this year. This is followed by the IMFâs expected growth for Indonesia at 4.3 -percent growth and then Thailandâs 2.6-percent growth.
The improved forecast for the Philippine economy parallels IMFâs better view of the world economy.
The IMF adjusted its global growth projection to 6 percent, up from the 5.5-percent forecast in January due mainly to significant improvements in the two largest economies of the worldâUS and Chinaâalong with prospects of a continued vaccination roll out.
For consumer prices, IMF forecasts a 3.6-percent growth in 2021 before receding to 3 percent in 2022. The governmentâs target range for inflation is 2 to 4 percent. Earlier, the BSP adjusted its own inflation projection to 4.2 percent on supply-side shocks.
For the countryâs unemployment rate, the IMF forecasts 7.4 percentâa significant improvement to the 10.4-percent actual unemployment rate in 2020. The IMF expects this to continue improving until 2022 with a forecast of 6.3 percent unemployment.
Earlier, Fitch Solutions slashed its 2021 Philippine growth forecast from 7.6 percent down to 5.8 percent, with risks âvery much tilted to the downside.â
âWe expect the lockdown measures to be extended given the continued surge in cases and the prolonged impact on hospital capacity,â Fitch Solutions said.
âThe likelihood of further outbreaks in other regions remains high and given the slow vaccination rollout in the country as less than 1 percent of the population has been vaccinated as of end-March, we believe the Philippinesâ recovery will continue to be hampered by the pandemic,â it added.
Moodyâs Analyticsâthe research arm of Moodyâs Groupâalso earlier said the Philippines âstands out as the laggardâ in the region as it faces a surge of new infections and fresh lockdown measures.