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Philippines: AMRO forecasts 6.9% growth for 2022
THE Asean+3 Macroeconomic Research Office (AMRO) sees Philippine gross domestic product (GDP) reaching 6.9 percent for 2022 and 6.5 percent for 2023.
Speaking at the 2021 AMRO’s Annual Consultation Report on the Philippines webinar, AMRO chief economist Hoe Ee Khor said that economic recovery in the Philippines remained on track despite recurrent waves of Covid-19 infections. Asean is the Association of Southeast Asian Nations.
“GDP growth rebounded by 5.7 percent in 2021 from a contraction of 9.5 percent in 2020. The recovery was mainly driven by improvements in investments and household consumption,” Khor explained. “In addition, a strong rebound in exports of goods, led by electronics, also contributed to the recovery, whereas exports of services remained weak, notwithstanding robust exports of business services.”
On other highlights, Khor noted that inflation picked up in the early part of the year due to rising oil and food prices.
“Given the supply disruptions from the war in Ukraine, AMRO also projects that the headline CPI (consumer price index) will rise to 4.4 percent in 2022 before declining to 3.8 percent in 2023,” he added.
The overall balance of payments was also broadly stable in 2021, with a current account deficit of $6.9 billion, or 1.8 percent of GDP, which was largely offset by net inflows in the financial account. However, the external account could face some pressure in 2022 as the global economic environment has become unstable.
Despite this, the recovery is beset by challenges. According to the report, given the high vaccination rate, a resurgence of Covid-19 infections should not pose a major risk unless the variant is more resistant to vaccines.
Furthermore, the rise of nonperforming loans continues to pose a risk to the banking sector’s financial health although the risk is mitigated by the recovering economic activity.
Going forward, AMRO suggested that policymakers need to strike a good balance between supporting the recovery and safeguarding against risks, the Bangko Sentral ng Pilipinas clarifying its monetary policy stance, and both public and private efforts to keep the economic recovery going in order to mitigate the continuing impact of the pandemic and global economic risks.
Source: https://www.manilatimes.net/2022/07/21/business/top-business/amro-forecasts-69-growth-for-2022/1851635