ADB KEEPS PHL GROWTH EXPECTATIONS IN ’21, ‘22
SLUGGISH private investment amid continued vaccinations has prompted the Asian Development Bank (ADB) to maintain its growth expectations for the Philippine economy this year and next year.
In its Asian Development Outlook Supplement released on Tuesday, ADB said growth is expected to average 4.5 percent in 2021 and 5.5 percent in 2022, the same estimates made in April 2021.
The Manila-based multilateral development bank also said inflation is expected to average 4.1 percent this year and 3.5 percent next year. This is the same projection it made last April.
“Sustained government spending on infrastructure and social assistance programs is supporting recovery, as did a gradual pickup in household spending aided by strong remittances. Private investment remained sluggish, but indicators such as PMI, industrial production, and imports improved gradually,” ADB said.
“The government’s vaccination effort has accelerated to over 250,000 jabs daily, improving the prospects that community protection in metropolitan Manila could be achieved by year end,” it added.
Inflation expectations were maintained for the Philippines, ADB said, given the government’s recent move to reduce tariffs on rice and meat imports.
ADB said the government’s measures, which are seen to allow more pork imports under low-tariff minimum access volume terms, will stem price increases of these commodities in the coming months.
’21 regional forecast cut
MEANWHILE, amid rising cases, the ADB cut its economic growth forecast for developing Asia this year to 7.2 percent from the 7.3 percent it estimated in April.
However, ADB said the growth outlook for 2022 was revised upward to 5.4 percent from the 5.3 percent forecast made last April.
“Asia and the Pacific’s recovery from the Covid-19 pandemic continues, although the path remains precarious amid renewed outbreaks, new virus variants, and an uneven vaccine rollout,” said ADB Chief Economist Yasuyuki Sawada.
“On top of containment and vaccination measures, phased and strategic rejuvenation of economic activities—for instance, trade, manufacturing, and tourism—will be key to ensure that the recovery is green, inclusive, and resilient,” he added.
Downward outlook for SEA
SOUTHEAST ASIA’S 2021 outlook was also revised downward to 4 from 4.4 percent on the back of renewed outbreaks that are met with containment measures and restrictions.
ADB said the Covid-19 pandemic remains the biggest risk to the outlook, as outbreaks continue in many economies. Daily confirmed cases in the region peaked at about 434,000 in mid-may.
They narrowed to about 109,000 at the end of June, concentrated mainly in South Asia, Southeast Asia, and the Pacific.
Meanwhile, the vaccine rollout in the region is gaining pace, with 41.6 doses administered per 100 people by the end of June—above the global average of 39.2, but below rates of 97.6 in the united States and 81.8 in the European union.
The supplement to the ADB’S flagship economic publication, Asian Development Outlook (ADO) 2021, provides updated projections for the region’s economies and inflation levels amid the Covid-19 pandemic.