The International Monetary Fund revised upward its 2021 growth projection for the Philippines to 4.6 percent from the previous estimate of 3.2 percent, taking into account the strong performance in the third quarter despite the COVID-19 pandemic.
IMF resident representative to the Philippines Ragnar Gudmundsson said in a response to Manila Standard’s online query after the release of the latest World Economic Outlook Tuesday that economic growth would continue to be strong in 2022 despite the threat of new COVID-19 variants.
“Real GDP growth in 2021 is now projected at 4.6 percent and has been revised up from 3.2 percent in our October 2021 forecast. This upward revision largely reflects the better-than-expected outturn during the third quarter of 2021, which resulted from the successful implementation of more granular lockdowns and targeted mobility restrictions during the third wave of COVID‑19,” Gudmundsson said.
Gudmundsson said despite the negative impact of Typhoon Odette on agricultural output, the recovery was sustained in the last quarter of 2021, underpinned by a continued reduction in the infection rate, lesser mobility restrictions and a higher vaccination rate.”
The Philippine economy is still projected to grow at 6.3 percent in 2022. This is because the carryover from the upward growth revision in 2021 is expected to be canceled out by the rapid spread of the Omicron variant and new quarantine measures in the first quarter of 2022,” Gudmundsson said.
Gudmundsson said strong growth was expected in the remainder of 2022, “as vaccination proceeds further, policy measures remain appropriately supportive, and private sector confidence improves.”
The latest World Economic Outlook for January 2022 cut the economic growth forecast this year for member countries of the Association of Southeast Asian Nations to 5.6 percent from the estimate of 5.8 percent made in the October 2021 WEO.
The ASEAN-5 group is composed of Indonesia, Malaysia, Thailand, Vietnam and the Philippines. IMF said the global economy entered 2022 in a weaker position amid higher inflation and the spread of the Omicron COVID variant.
It said ASEAN-5 likely posted a strong rebound in 2021, with a growth of 3.1 percent after contracting by 3.4 percent in 2020. For 2023, the IMF expects ASEAN-5 to post a faster GDP growth of 6 percent.
The Philippine economy contracted by a record 9.6 percent in 2020, the worst performance since World War 2. In the first three quarters of 2021, GDP grew by 4.9 percent, near the government’s target range of 5 percent to 5.5 percent.