Economy · July 22, 2022

ADB raises PH growth forecasts

The Asian Development Bank (ADB) now expects the Philippine economy to hit the lower end of the government’s 2022 target.

“The growth forecast for the Philippines increased from 6.0% to 6.5% for 2022 on a stronger-than-expected first quarter (first quarter) performance, supported by rebounds in investment and household consumption,” the Manila-based multilateral said in its Asian Development Outlook 2022 Supplement released Thursday.

The economy, as measured by gross domestic product, grew 8.3 percent in the first quarter of the year. The government is aiming for an expansion of 6.5 to 7.5 percent for 2022, recently reduced from 7.0 to 8.0 percent but even stronger than last year’s actual growth of 5.7 percent.

The forecast for 2023 was kept at 6.3%, below the government target of 6.5% to 8.0%.

“Against vaccination coverage against Covid-19 and the relatively mild health impacts of the Omicron variant have allowed the economy to reopen further.

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Mobility data in various activities, including work and recreation, has now returned to pre-pandemic levels, “the ADB said.

It found that large public infrastructure projects are already underway, while indications from the private sector, the purchasing managers’ index, industrial production and imports show continued growth.

The lender, however, warned that there are “significant downside risks to growth in the second half due to a slowdown in major advanced economies and the possibility of high commodity prices being supported as a result of the war in Ukraine.”

Growth in major advanced economies this year and next will be less than expected, the ADB said, as domestic and foreign demand were hampered by economic pessimism following the Russian invasion of Ukraine.

Aggressive US Federal Reserve rate hikes to keep long-term inflation expectations close to target have further exacerbated the gloomier outlook, he added.

“Overall, the growth forecast for major advanced economies is revised down from 3.5% to 2.3% for 2022 and from 2.4% to 1.8% for 2023,” he said. the ADB.

Meanwhile, accelerating fuel and food prices are said to have raised inflation forecasts for developing Asia, including the Philippines, to 4.2% from 3.7% for 2022. and to 3.5% from 3.1% for 2023.