IMF SLASHES PHL GDP FORECAST FOR ‘20, ‘21

THE International Monetary Fund (IMF) slashed its growth projection of the Philippine economy for 2020 and 2021, as the country performed worse than earlier expected in the third quarter of 2020.

In an e-mail in response to reporters, IMF resident representative to the Philippines Yongzheng Yang said that the IMF now forecasts a real gross domestic product (GDP) contraction of 9.6 percent for the Philippines in 2020. This is a downward revision from their earlier forecast of negative 8.3 percent in October.

Yang also said they revised the real GDP growth forecast of the Philippines for 2021, at 6.6 percent. This is also lower than the earlier projection of 7.4 percent.

The IMF’S new projections for the Philippine economy are in contrast to the new outlooks made by the IMF in their latest World Economic Outlook (WEO).

In their January 2021 WEO, the IMF revised the world economy’s growth upwards to 5.5 percent in 2021 from the 5.2-percent projection in the October WEO.

The IMF said this reflects expectations of a “vaccine-powered” strengthening of activity later in the year and additional policy support in a few large economies.

“The downward revision for [the Philippine economy in] 2020 mainly reflects the larger-thanexpected year-on-year contraction in the third quarter. The projected rebound in 2021 and 2022 is primarily driven by a renewed infrastructure investment push and a

gradual recovery of the private sector supported by accommodative monetary policy and global recovery,” Yang said.

IMF projects a 6.5-percent growth for the Philippines in 2022.

While the 2021 and 2022 growth projections are above the world growth estimates and the forecasts for the Asean-5—which is at 5.2 percent in 2021 and 6 percent for 2022—they are still below the government’s growth projections for both years.

In December, the DBCC forecast the Philippines to grow between 6.5 percent and 7.5 percent in 2021; and 8 percent to 10 percent in 2022.

Earlier this month, Moody’s Analytics said the Philippines will be the last country in the Asia Pacific to regain its economic performance to pre-covid levels as the country still grapples to make a concrete plan on vaccine procurement and fiscal stimulus remains relatively minute.

The Philippine Statistics Authority is expected to release the Philippines’s full-year GDP on Thursday.