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- IMF cuts Philippines growth outlook for 2022
- IMF leaves growth forecast for 2023 at 5.0%
- Philippine c.bank’s short-term tightening is ‘appropriate’
MANILA, Sept 26 (Reuters) – The Philippine economy will grow at a slower pace this year than previously thought due to the global economic slowdown and tightening financial conditions, the International Monetary Fund (IMF) said on Monday.
The IMF said the economy will grow 6.5%, weaker than the previous forecast of 6.7% but in line with the Philippine government’s 6.5%-7.5% growth target.
Next year the economy should grow by 5.0%, unchanged from the July forecast but much weaker than the April forecast of 6.3% growth.
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“The economy was able to recover quickly and remains fundamentally healthy, but the world has been dealt with at a 1-2 blow. The pandemic is behind us, but we now face a gloomier and more uncertain global economy,” Cheng Hoon Lim, IMF head of mission, said in a news conference.
The economy of the Philippines grew by 7.4% in the second quarter.
Lim also said that the Philippine central bank’s “continued short-term tightening was appropriate to keep inflation expectations anchored and reduce headline inflation.”
Philippine inflation averaged 4.9% in January-August, beating the central bank’s comfort range of 2% to 4%.
Bangko Sentral ng Pilipinas (BSP) has hiked interest rates by a total of 225 basis points so far, bringing its policy rate (PHCBIR=ECI) to 4.25% to fight inflation.
GNP monetary tightening comes as many central banks around the world hike interest rates to curb mounting price pressures.
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Reporting by Neil Jerome Morales; Edited by Kanupriya Kapoor, Louise Heavens and Ana Nicolaci da Costa
Our standards: The Thomson Reuters Trust Principles.
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