IMF WARNS OF SLOWER RECOVERIES IN REGION
A broader look at today’s business Thursday, April 15, 2021 Vol. 16 No. 183 P. | |
THE International Monetary Fund (IMF) has warned of potentially slower economic recoveries in the region, as governments reimpose strict movement, travel and operational restrictions amid the rising cases of Covid-19 in the region.
In a virtual press conference on Asia Pacific economic developments late Tuesday, IMF Acting Director of the Asia and Pacific Department Jonathan Ostry cautioned of a weaker economic recovery, especially in the Association of Southeast Asian Nations (Asean)-5 bloc due to rising cases.
Ostry particularly cited the Philippines, Indonesia and Malaysia as countries who are at risk to this scenario.
In its most recent issue of the
World Economic Outlook (WEO), the IMF raised the Philippines’s growth projection for 2021 from 6.6 percent to 6.9 percent.
Enhanced community quarantine (ECQ), however, has been reimplemented in the National Capital Region (NCR) along with other neighboring provinces as Covid-19 cases continued to rise in the country.
e IMF director asserted that
the containment policies being put back in place are “costly economically” but are “necessary” for the economy and the local health systems.
At present, Ostry said, “there is no better investment that countries can make” than ensuring quick and efficient vaccine rollouts for most of the population.
“What we have emphasized is the need for accelerating the vaccine rollout for assuring fast, universal distribution at affordable prices throughout the Asia Pacific region,” he said.
“Only once populations are fully vaccinated will we get back to a healthy, sustainable recovery and that is urgently needed,” he added.
RCBC cuts forecast
RIZAL Commercial Banking Corp. (RCBC) chief economist Michael Ricafort also announced on Wednesday they are cutting their growth forecast of the Philippines from their earlier estimate of 6 to 7 percent down to 5 to 6 percent.
Ricafort said this is largely due to the tighter quarantine standards in NCR Plus since March 29, 2021 in response to the new record-high Covid-19 local cases.
“GDP growth estimates could be reduced further if tiger quarantine standards [i.e. MECQ (Modified Enhanced Community Quarantine) in NCR Plus] are extended,” Ricafort added.
Earlier, Bangko Sentral ng Pilipinas (BSP) governor Benjamin Diokno said the Government will also likely revise their growth target for the year. Diokno’s personal calculations point to a reduction of the range from the initial 6.5 to 7.5 percent down to 6 to 7 percent.
Fitch Solutions also slashed its 2021 Philippine growth forecast from 7.6 percent down to 5.8 percent, with risks “very much tilted to the downside.”
“We expect the lockdown measures to be extended given the continued surge in cases and the prolonged impact on hospital capacity,” Fitch Solutions said.
“e likelihood of further outbreaks in other regions remains high and given the slow vaccination rollout in the country as less than 1 percent of the population has been vaccinated as of endmarch, we believe the Philippines’ recovery will continue to be hampered by the pandemic,” it added.
Moody’s Analytics—the research arm of Moody’s Group— also earlier said the Philippines “stands out as the laggard” in the region as it faces a surge of new infections and fresh lockdown measures.
e Department of Health (DOH) reported on Wednesday that the total number of Covid-19 cases in the country hit 892,880 after 8,122 cases were reported during the day.
e Philippines’s recent daily cases are the largest in the Asean-5 bloc. As of April 13, Indonesia’s 7-day average of new Covid-19 cases hit 5,001 cases, Malaysia at 1,516 cases, ailand at 715 cases, and Singapore at 25 cases. e Philippines’s 7-day average as of April 13 is at 10,289 cases.