IMF hikes PHL growth forecast for 2013
The International Monetary
Fund (IMF) has raised its outlook for the country’s economic growth for this
year and the last on the back of robust domestic consumption and investments,
officials of the multilateral lender said Wednesday.
“During 2012, the Philippine economy shrugged off weakness abroad by growing at around 6.5 percent while also maintaining price stability,” Rachel Van Elkan, head of the IMF’s mission to the Philippines, told reporters at a briefing in Pasay City.
Van Elkan noted that the faster forecast was due to “accelerating consumption and investment, fuelled by remittances, higher public spending and low interest rates.”
“Going forward, growth is expected to moderate to a more sustainable level, but to remain strong compared to the past, with annual growth projected by the IMF staff at 6 percent and 5.5 percent,” she added.
The IMF earlier forecast the Philippine economy to grow by 4.8 percent for both 2012 and 2013. It did not have a previous projection for 2014.
Van Elkan said the slower but still strong growth forecast this year and the next were due to waning base effects.
Apart from robust consumption, stronger growth forecast last year was also partly attributed to base effects, as the country grew by a disappointing 3.7 percent in 2011.
On Tuesday, Socioeconomic Planning Secretary Arsenio Balisacan said he expects that the Philippine economy grew by 6.5 percent last year, adding that the economy has gained momentum for this year.
The interagency Development Budget Coordination Committee targets a 6 percent to 7 percent growth this year and 6.5 percent to 7.5 percent in 2014.
IMF, however, warned of downside risks to growth. “Macro-financial challenges are emerging, even as structural issues remain,” Van Elkan said.
Van Elkan noted that potentially volatile capital flows place upward pressure in the peso, while low interest rates may fuel financial assets.
But “policymakers have responded in a timely and flexible manner to the difficult global conditions,” she said. — BM, GMA News
“During 2012, the Philippine economy shrugged off weakness abroad by growing at around 6.5 percent while also maintaining price stability,” Rachel Van Elkan, head of the IMF’s mission to the Philippines, told reporters at a briefing in Pasay City.
Van Elkan noted that the faster forecast was due to “accelerating consumption and investment, fuelled by remittances, higher public spending and low interest rates.”
“Going forward, growth is expected to moderate to a more sustainable level, but to remain strong compared to the past, with annual growth projected by the IMF staff at 6 percent and 5.5 percent,” she added.
The IMF earlier forecast the Philippine economy to grow by 4.8 percent for both 2012 and 2013. It did not have a previous projection for 2014.
Van Elkan said the slower but still strong growth forecast this year and the next were due to waning base effects.
Apart from robust consumption, stronger growth forecast last year was also partly attributed to base effects, as the country grew by a disappointing 3.7 percent in 2011.
On Tuesday, Socioeconomic Planning Secretary Arsenio Balisacan said he expects that the Philippine economy grew by 6.5 percent last year, adding that the economy has gained momentum for this year.
The interagency Development Budget Coordination Committee targets a 6 percent to 7 percent growth this year and 6.5 percent to 7.5 percent in 2014.
IMF, however, warned of downside risks to growth. “Macro-financial challenges are emerging, even as structural issues remain,” Van Elkan said.
Van Elkan noted that potentially volatile capital flows place upward pressure in the peso, while low interest rates may fuel financial assets.
But “policymakers have responded in a timely and flexible manner to the difficult global conditions,” she said. — BM, GMA News
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