Medela sees 8-9% growth in the second quarter

Central Bank of the Philippines Governor Felipe Medala sees the Philippine economy expanding by 8 to 9 percent in the second quarter of the year.

“Maybe it can’t be between nine and eight percent,” he told reporters at the weekend. “The problem is the second half will be slower. That’s why my personal forecast is seven for this year.”

Medala’s view compares GDP growth of 8.3 percent in the first quarter of the year.

He said during an online business forum organized by the Manila Times entitled “Making the Course in Changing the Guard” that economic growth of 6.5 percent or higher could be achieved this year given the continued strength of indicators such as foreign direct investment and consumers. and business sentiments.

“So, I’m actually very optimistic about the economy under the current president… I would say 80 percent of the economy is now well above pre-pandemic levels,” Medala added.

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He said that the economy can adapt to the aggressive monetary policy adopted by the central bank to curb inflation.

The International Monetary Fund said earlier that it expects the Philippines’ gross domestic product to expand within the government’s target this year before slowing down by 2023.

“Our forecast for GDP growth for 2022 is currently 6.7 percent, reflecting the strong recovery momentum in the first half of the year, with increased mobility as the impact of the Omicron wave has proven to be less severe than expected,” Ragnar noted. Gudmundson.

The IMF’s latest growth estimate for the Philippines is an upward revision from its previous forecast of 6.5 percent.

The economy, as measured by gross domestic product, grew 8.3 percent in the first quarter of the year. The government is targeting an expansion of 6.5 to 7.5 percent for 2022, which was recently reduced from 7 to 8 percent, but still stronger than last year’s actual growth of 5.7 percent.

However, Gudmundsson said the pace of growth is expected to slow in the second half of 2022 and into 2023 due to fundamental impacts, the effects of the Ukraine war, a slowdown in major trading partners, a faster tightening of US monetary policy and a rally. inflation.

“As a result, we currently expect GDP growth in 2023 to fall to around 5 percent,” he said, adding that there is “a great deal of uncertainty about growth prospects in such a volatile global environment.”

The forecast for 2023 was revised down from the previous forecast of 6.3 percent and is well below the government’s target range of 6.5 to 8 percent.

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