The ASEAN+3 Macroeconomic Research Office (AMRO) has revised higher its growth forecast for the Philippines this year to 6.9 percent from 6.5 percent two months ago due to rising domestic demand and strong fiscal support.
The ASEAN+3 Macroeconomic Research Office has revised higher its growth forecast for the Philippines this year to 6.9 percent from 6.5 percent two months ago due to rising domestic demand and strong fiscal support.
Khor said their 2022 growth estimate is “slightly less optimistic” compared to the government’s seven percent to eight percent target for 2022. “Nevertheless, at 6.9 percent, it is among the highest growth rate in the region,” he added.AMRO, a regional macroeconomic surveillance organization, noted that the economy is recovering steadily and it is sustained, coming from a 9.6 percent GDP contraction in 2020, then rebounding strongly to a 5.6 percent growth in 2021.
He also expects the export sector and the business process outsourcing industry to do well this year. “ is less affected by external demand … the spillover effect on the economy will not be as high as it is for some of the other economies,” said Khor. Khor thinks the BSP will likely adjust interest rates further until it reaches four percent. “Since the economy is rebounding quite strongly, the central bank has started to raise rates. They have normalized the rate to 2.5 percent and it’s better to raise it to a neutral level which is around four percent,” he said.
The consultation covered the government’s anti-pandemic response since 2020, the vaccination progress and the status of economic recovery including the risks and challenges, as well as policy responses. On Tuesday, AMRO said that due to the impact of recent Covid-19 outbreaks in China, plus the headwinds from the Ukraine conflict, it has adjusted lower its short-term growth forecast for the ASEAN+3 region.
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