Recently the International Monetary Fund (IMF) raised its 2024 growth forecast for the Philippines to 6.2% which is within national government’s growth range for this year, according to a Manila Bulletin news report.
To put things in perspective, posted below is an excerpt from the Manila Bulletin news article. Some parts in boldface…
The International Monetary Fund (IMF) has raised its Philippine growth forecast to 6.2 percent for 2024 from its previous estimate of six percent announced last January, citing carryover strength from the last quarter of 2023.
The IMF also expects the country’s gross domestic product (GDP) to grow by 6.2 percent in 2025, higher than its January forecast of 6.1 percent.
Based on the April IMF World Economic Outlook (WEO) report released Tuesday, April 16 (Washington time), the IMF also projects Philippine inflation will fall to below four percent this year and in 2025. Its projected year-end inflation is 3.6 percent for 2024 and three percent for 2025 which is within the government target of two percent to four percent.
Meanwhile, the 6.2 percent IMF GDP outlook for 2024 is within the Marcos administration’s growth target of six percent to seven percent but the 2025 projection is below the government target of 6.5 percent to 7.5 percent.
IMF’s Resident Representative in the Philippines Ragnar Gudmundsson said in an email that real GDP growth for 2024 was revised slightly to 6.2 percent from six percent in the January WEO because of “carryover from a better-than-expected outturn in the last quarter of 2023.” The local economy grew by 5.6 percent in the fourth quarter 2023, bringing the full-year GDP to 5.6 percent.
As to the 2025 growth outlook, Gudmundsson said the 6.2 percent GDP expansion next year will be “supported by an acceleration in domestic demand and investment.”
“Over the medium term, structural reforms to close infrastructure and education gaps, attract greater FDI (foreign direct investments), and harness benefits from the digital economy should help realize a growth potential of about 6-6.5 percent. These reforms should be complemented by strengthening existing social protection schemes and addressing climate change through a more integrated strategy that includes a carbon pricing scheme,” he said.
Gudmundsson said the 6.2 percent GDP forecast for the Philippines “compares with an average growth rate for ASEAN countries in 2024 of 4.6 percent.”
Based on the latest WEO, the IMF forecast the Asian regional economy will grow by 4.5 percent this year and 4.3 percent in 2025.
Let me end this piece by asking you readers: What is your reaction to this recent development? Do you think the Philippine economy has enough momentum to surpass the 6.2% growth forecast of the IMF for 2024? Do you think inflation in the country will slow down more than what the IMF predicts?
You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.
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