IMF retains 2019 GDP growth forecast at 5.7% following strong Q3 expansion

The International Monetary Fund on Monday maintained its 2019 growth forecast for the Philippines at 5.7 percent, saying the economy is “recovering” after a sluggish 5.5-percent expansion in the first half.

IMF mission chief Thomas Helbling said in a news briefing at the Bangko Sentral ng Pilipinas that the Philippines remained one of the best-performing economies in the region.

“After a soft patch in the first half of the year, economic growth is recovering. Inflation has declined, reflecting lower oil prices, rice tariffication and a decisive monetary policy response to the inflation spike in 2018,” Helbling said.

“We see the 5.7 percent a very strong forecast,” Helbling said, adding that the fourth-quarter growth could still be robust on faster government spending.

Helbling said the 6.2-percent third-quarter economic expansion was considered by IMF in its decision to keep the 5.7-percent forecast for 2019. The same figure was announced in the October 2019 World Economic Outlook.

The IMF team visited Manila, Clark City and New Clark City from Nov. 5 to 18, 2019 for the Article IV consultation. 

Helbling said economic growth would accelerate to 6.3 percent in 2020, driven by an increase in government spending and the recent monetary policy easing.

“The medium-term economic outlook remains favorable, especially if the strong structural reform momentum continues,” Helbling said.

He said the inflationary pressures of 2018 dissipated this year. He said with the current projections of global commodity prices and domestic policy trajectories, inflation was expected at 1.6 percent by yearend and at 3 percent by the end of 2020.

Inflation in October 2019 dipped to a 42-month low of 0.8 percent from 0.9 percent in September, tempered by base effects and slower increases in the prices of food and oil, the Philippine Statistics Authority said earlier.

Topics: International Monetary Fund , Thomas Helbling , Bangko Sentral ng Pilipinas , October 2019 World Economic Outlook
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