ADB upgrades growth outlook on PHL
September 22, 2022 - Thursday 11:09 AM by GDMPhoto from Wikipedia
A strong rebound in domestic demand with the easing of COVID-19 mobility restrictions in the country will support robust growth for the Philippine economy in 2022, the Asian Development Bank said.
This is despite higher inflation due to global and local price pressures, according to a report released Wednesday by ADB.
The Philippines’ gross domestic product (GDP) will grow 6.5% in 2022, the same as forecast in July but up from the bank’s April forecast of 6.0%, according to ADB’s Asian Development Outlook (ADO) 2022 Update.
The growth projection for 2023 is kept at 6.3% as monetary policy tightening and accelerating inflation both crimp domestic demand, ADB said.
Inflation is now expected to quicken to 5.3% in 2022, up from the July forecast of 4.9% and 4.2% in the April ADO 2022 report, underpinned by sharp upward shocks to global energy and commodity prices.
The negative impact of natural disasters on domestic agricultural supply will likely lead to higher food prices until the end of the year, ADB explained.
The inflation forecast for 2023 is kept at 4.3% since the return to steady economic growth will keep inflation relatively stable and with energy prices likely to decelerate.
"The normalization of socioeconomic activity will usher the Philippine economy to a steady, pre-pandemic pace of expansion," said ADB Philippines Country Director Kelly Bird.
"The recovery in tourism and private investments, coupled with sustained public spending on large infrastructure projects and remittances from overseas Filipinos, will bolster the country’s economic recovery this year," he added.
However, according to the report, downside risks to the growth outlook could come from a sharper slowdown in major advanced economies, heightened geopolitical tensions, and possible sustained elevated global commodity prices due to the Russian invasion of Ukraine.
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