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According to [CNN Philippines], the Asian Development Bank kept its growth projections for the country for 2021 and 2022 but warned of risks in its economic recovery.
In its Asian Development Outlook (ADO) 2021 Update published on Wednesday, the regional lender noted its 4.5% and 5.5% forecasts for this year and the next remain unchanged. This comes as “recovering domestic demand and global trade align” with the projections it made in April’s ADO release.
However, ADB still flagged the effect of the global health crisis on the economy’s trajectory.
“The economy has regained its footing and is on the right growth path. But the recovery remains fragile due to the threat posed by more infectious COVID-19 variants,” said ADB Philippines country director Kelly Bird.
The Manila-based organization also noted “periodically” stricter restrictions aimed to stop the spread of COVID-19, especially in the capital region.
ADB also noted the strides the government has made in its vaccination drive, which has been concentrated in major urban areas like the National Capital Region.
The significant amount of deliveries to be made for the remainder of 2021 will also lead to speedier inoculation activities outside the main economic hub, added ADB.
Widespread vaccination will allow lockdowns to be eased further and for more businesses to operate,” ADB noted as it expects a gradual recovery for employment in the country.
ADB’s forecast for this year dwells within the economic team’s target band for 2021, but its projection for 2022 falls short of the officials’ range for next year.
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ADB Headquarters, Philippines. (Photo / Retrieved from Flickr)
Inflation forecasts retained; current account projections revised
ADB also maintained its expectations for the inflation rate this year at 4.1% — above the central bank’s 2-4% target band for 2021.
Inflation has averaged so far this year at 4.4%, the latest pace being 4.9% in August. The BSP said it still it expects inflation to eventually settle within its target range for the year.
Meanwhile, the ADB projects the Philippines’ current account to stay in surplus but at revised figures for 2021 and 2022.
According to [CNN Philippines], from 2.5% of the country’s gross domestic product, the current account is expected to be equal to 1% of overall Philippine economic output in 2021 and 1.8% in 2022 from the prior 0.8% forecast.
