By Chino S.Leyco
The Asian Development Bank (ADB) has kept its growth forecasts for the Philippines following the rebound in public spending, while trimming its projections for other developing nations in the region.
In a supplement to its Asian Development Outlook 2019, ADB said yesterday that the gross domestic product (GDP) forecasts for the Philippines were maintained at 6.0 percent this year and 6.0 percent next year.
“GDP growth is seen accelerating in fourth-quarter of 2019 and throughout 2020, supported by investment as more infrastructure projects come on stream.
Accommodative fiscal and monetary policies will [also] support domestic demand,” ADB said.
In the third-quarter, the local economy picked up to 6.2 percent, boosting growth in January to September to 5.8 percent.
“The pickup was supported by a rebound in government expenditure, particularly on infrastructure,” the Manila-based lender said.
On Wednesday, the economic managers of President Duterte have trimmed their GDP target to between 6.0 percent and 6.5 percent from 6.0 percent to 7.0 percent this year to reflect weak economic activity in the first-half.
Meanwhile, the ADB has lowered its forecasts for the developing Asian region this year and next year as growth in China and India is weighed down by both external and domestic factors.
The ADB now expects GDP in the region to expand 5.2 percent in both 2019 and 2020, down from the September forecast of 5.4 percent growth this year and 5.5 percent next year.
Yasuyuki Sawada, ADB chief economist said that while growth rates were still solid in developing Asia, persistent trade tensions have taken a toll on the region and are still the biggest risk to the longer-term economic outlook.
“Domestic investment is also weakening in many countries, as business sentiment has declined,” Sawada said. “Inflation, on the other hand, is ticking up on the back of higher food prices, as African swine fever has raised pork prices significantly.”