ADB retains PH growth outlook
THE Asian Development Bank has maintained its forecasts for Philippine economic growth, with this year's expansion in particular to be supported by lower inflation and interest rates.
In the July update to its Asian Development Outlook, the Manila-based lender retained its 2024 and 2025 growth projections for the country at 6.0 percent and 6.2 percent, respectively.
The forecast for 2024 falls within the government's 6.0- to 7.0-percent target, but that for next year is short of the 6.5- to 7.5-percent goal.
Household consumption will be the main growth contributor this year, the ADB said, amid low unemployment and continued migrant worker remittances.
"[M]oderating inflation and expected monetary easing in the second half of 2024 will support household consumption and investment," it added.
Inflation forecasts were also retained for this year and next year at 3.8 percent and 3.4 percent, respectively, both within the 2.0 to 4.0 percent target of the Bangko Sentral ng Pilipinas (BSP).
Consumer price growth in the region is expected to slow, and the ADB noted that prices of key food items such as «meat, fish, pork, short mackerel, sea bass, and fresh vegetables» were lower than expected due to large market supply.
Advertisement«Headline inflation continued decreasing toward pre-pandemic levels, mainly due to the lagged effects of tight monetary policy and a slight easing of global food prices,» it added.
In the Philippines, inflation snapped a four-month rise and slowed to 3.7 percent last month.
The central bank expects inflation to slow further in the coming months, with outlooks for this year and 2025 recently revised downwards due to improvements in the price growth outlook.
The risk-adjusted forecast is now 3.1 percent, down from the previous 3.8 percent. That for 2025 was also cut to 3.1 percent from 3.7 percent.
AdvertisementThe baseline forecast for 2024, meanwhile, was trimmed to 3.3 percent from 3.5 percent, while the 2025 projection was also lowered to 3.1 percent from 3.3 percent.
The ADB, meanwhile, expects most of the central banks in the region to keep policy rates steady to keep currencies competitive against the dollar.
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