ADB maintains PH GDP forecast at 6.5%

The Asian Development Bank (ADB) said Wednesday it is maintaining its 6.5 percent growth forecast for the Philippine economy this year, buoyed by the country’s recovery from the COVID-19 pandemic.

The Asian Development Prospects Update 2022 added that the growth forecast for 2023 remains at 6.3 percent as monetary policy tightening and accelerating inflation will affect domestic demand.

For this year, the ADB observed a rebound in travel, recreation, dining and home consumption in the first half of 2022 as restrictions on movement eased. She added that most sectors, such as services, contributed to the recovery of employment.

“The normalization of social and economic activity will lead the Philippine economy to a steady pace of expansion before the pandemic,” Kelly Bird, director of the Asian Development Bank in the Philippines, said in a statement.

“The pickup in tourism and private investment, along with continued public spending on massive infrastructure projects and remittances from overseas Filipinos, will boost the country’s economic recovery this year,” Bird added.

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The Asian Development Bank also noted that growth across developing Asia fell by 4.3 percent compared to previous forecasts – 4.6 percent in July and 5.2 percent in April.

While some economists expect the Philippines’ GDP growth to slow to a range of 5.9 percent to 6.6 percent, the government expects the country’s GDP to grow between 6.5 and 7.5 percent this year.

The Asian Development Bank also noted a sharp slowdown in major advanced economies, escalating geopolitical tensions and the prospect of higher global commodity prices due to Russia’s invasion of Ukraine, which made the actual growth of the Philippine economy less than its forecast.

The Regional Development Bank also stated that inflation is expected to accelerate faster to an average of 5.3% in 2022, higher than its July forecast of 4.9%.

This is well above the government’s target of 2 to 4 percent. The Asian Development Bank cited global energy shocks and natural disasters in its upward review.

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