The International Monetary Fund slashed its 2015 economic growth outlook for the Philippines to 6.2% from 6.7% after revising downwards its forecast for global growth amid the slow US economic recovery.
IMF resident representative Shanaka Jayanath Peiris said the country’s gross domestic product growth forecast was revised downwards to 6.2% this year based on the World Economic Outlook for July.
“Real GDP is projected to grow by 6.2% in 2015 as lower commodity prices lift household consumption and improved budget execution raises public spending, though slightly lower than expected previously due to weaker global growth and a fiscal deficit below targeted,” Peiris said.
The revised IMF forecast is lower than the government’s GDP growth target of 7-8% this year.
The IMF releases its WEO report during April and in September or October of every year. An updated WEO is also released every January and July of each year.
The Philippines recorded a 5.2% GDP growth in the first quarter of the year from 5.6% in the same quarter last year on the back of anemic spending caused by delays in the implementation of much-needed infrastructure projects.
“The first quarter 2015 slowdown was due mainly to temporary factors, including the effects of dry weather on agricultural production, weak global demand, and slow budget execution,” Peiris said.
The Philippines missed its GDP growth target of between 6.5% and 7.5% as the domestic economy expanded only by 6.1% last year from 7.2% in 2013.
Peiris said IMF sees the country’s economic expansion picking up to 6.5% instead of 6.3% next year on the back of higher spending.
“Growth is expected to accelerate further in 2016 to 6.5% as the budget deficit widens to the targeted 2% of GDP and in line with potential growth,” he said.
