ECONOMY: MANILA- ADB slashes growth forecasts for Philippine economy as inflation bites
In an update of its annual economic publication, the Manila-based multilateral lender said it expects the Philippine economy to grow 6.4 percent in 2018, before picking up to 6.7 percent next year. If realized, this would fall below the government’s 7-8 percent goal.
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MANILA, Philippines — The Asian Development Bank on Wednesday downwardly revised its growth outlook on the Philippine economy following the slower than expected gross domestic product expansion in the first half of the year.
In an update of its annual economic publication, the Manila-based multilateral lender said it expects the Philippine economy to grow 6.4 percent in 2018, before picking up to 6.7 percent next year. If realized, this would fall below the government’s 7-8 percent goal.
ADB’s latest growth forecasts were lower than its previous estimate of 6.8 percent for this year and 6.9 percent next.
‘Moderation in agri output and exports, higher inflation’
The revised outlook for the Philippines “reflects a moderation in agricultural output and exports, as well as higher inflation and continued global monetary tightening,” the Bank said. “Inflationary pressures are expected to taper off next year as tighter domestic monetary policy begins to take effect.”
Actual GDP—or the value of all finished goods and services produced in the country—sharply eased to 6.0 percent in the second quarter, the slowest pace since the similar 6.0-percent expansion recorded in the third quarter of 2015.
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The latest GDP figure was lower than the downwardly revised 6.6 percent in the first quarter and the 6.7 percent clocked in the comparable period last year. In the first half of the year, the economy grew at 6.3 percent.
“The Philippines’ growth outlook remains stable despite moderating slightly in the first half of the year, as the country’s economic fundamentals are strong,” said Kelly Bird, ADB country director for the Philippines.
“We’re expecting growth to slowly pick up as public investment in infrastructure and social sectors accelerate and key economic sectors continue to perform solidly,” Bird added
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