ADB keeps 2018-19 PH growth forecasts
Credit to Author: MAYVELIN U. CARABALLO, TMT| Date: Wed, 12 Dec 2018 16:30:34 +0000
The Asian Development Bank (ADB) has kept its Philippine growth forecasts for this year and the next, citing government and private sector spending as the primary drivers of expansion.
In a supplement to its 2018 Asian Development Outlook (ADO), the Manila-based multilateral lender said it continued to expect gross domestic product (GDP) growth of 6.4 percent and 6.7 percent, respectively, for 2018 and 2019.
“GDP growth is seen accelerating through 2019, supported by robust public and private investment,” it said.
Both estimates are lower than the government’s revised 6.5-6.9 percent target for this year and the 2019 goal of 7.0-8.0 percent.
GDP growth is running below target based on latest data, averaging 6.3 percent as of end-September following first to third quarter outturns of 6.6 percent, 6.2 percent and 6.1 percent, respectively.
The ADB first issued the 6.4- and 6.7-percent forecasts in September, when it released an updated ADO and said that growth for both years would likely be lower than the initial 6.8 percent (2018) and 6.9 percent (2019), given a first half slowdown.
The lender, meanwhile, raised its 2018 inflation forecast to 5.3 percent from 5.0 percent previously despite acknowledging that consumer prices were moderating.
It noted that the Philippines saw inflation ease to 6 percent in November from a high of 6.7 percent in October, for an 11-month average of 5.2 percent that is well up from 2.9 percent a year earlier.
“While inflation is expected to ease, the full-year average is still likely to exceed the [initial] projection… The inflation forecast for 2018 is therefore revised up from 5.0 percent to 5.3 percent,” the lender said.
Going forward, the ADB believes that the recent buildup in inflationary pressures should moderate next year. It maintained its 2019 inflation forecast at 4 percent.
“Tight monetary policy will kick in following a cumulative rate hike of 175 basis points implemented from May to November 2018,” it also noted.
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