The Asian Development Bank (ADB) now expects the Philippine economy to bottom out on the government’s 2022 target.
“Growth forecast for the Philippines has been raised from 6.0% to 6.5% for 2022 on stronger-than-expected performance in the first quarter (Q1), underpinned by a recovery in household investment and consumption,” the multilateral organization said in a statement. Manila. An update to the 2022 development outlook was released on Thursday.
The economy, measured by gross domestic product, grew 8.3 percent in the first quarter of the year. The government is targeting 6.5-7.5% growth by 2022, recently reduced from 7.0% to 8.0% but still stronger than last year’s actual growth of 5.7%.
The forecast for 2023 was kept at 6.3 percent, below the government’s target of 6.5 to 8.0 percent.
“The broader Covid-19 vaccination coverage and the relatively mild health impact of the Omicron option have allowed the economy to reopen.
Mobility data for several activities, including work and leisure, have now returned to pre-pandemic levels,” the ADB said in a statement.
He noted that large-scale public infrastructure projects are already underway, while private sector indicators, purchasing managers index, industrial production and imports show continued growth.
The lender, however, warned that there were “significant downside risks to growth in the second half of the year due to a slowdown in major advanced economies and the possibility of continued elevated commodity prices due to the war in Ukraine.”
The ADB said growth in major advanced economies this year and next will be less than expected as domestic and external demand is held back by pessimistic economic sentiment in the wake of Russia’s invasion of Ukraine.
Aggressive interest rate hikes by the US Federal Reserve to keep long-term inflation expectations close to the target have exacerbated the bleak outlook further, he added.
“In aggregate, the growth forecast for major advanced economies has been revised down from 3.5% to 2.3% for 2022 and from 2.4% to 1.8% for 2023,” the ADB said in a statement. .
Meanwhile, rising fuel and food prices have reportedly raised inflation forecasts for developing Asia, including the Philippines, to 4.2 percent from 3.7 percent in 2022 and to 3.5 percent from 3.1 percent. percent for 2023.