ADB trims 2015 PH growth forecast to 5.9%
MANILA, Philippines – The Asian Development Bank (ADB) trimmed its growth forecast for the Philippines this year to 5.9% from the previous 6% to reflect lower-than-expected growth in the third quarter.
In a supplement to the September 2015 Asian Development Outlook Update report released Thursday, December 3, ADB said that net external demand weighed on the Philippines' gross domestic product (GDP) growth in the first 3 quarters of 2015.
The multilateral bank agency said that it reflects brisk expansion in imports on strong domestic demand and only a modest rise in merchandise exports.
PH growth forecast for 2016 retained
The ADB's growth forecast for the Philippines next year is maintained though at 6.3%.
"Private investment recorded robust expansion, and household spending was supported by higher employment, low inflation, and remittance inflows from Filipino workers overseas," ADB said.
It added that government expenditure accelerated rapidly, with public expenditure rising by 41.2% in the third quarter as budget execution was enhanced."On the supply side, services and manufacturing were the key growth drivers," ADB added.
The ADB also slashed its inflation forecast for the Philippines this year to 1.6% from the previous projection of 2%. (READ: PH November inflation climbed to 0.6% – HSBC)
"Inflation averaged 1.4% in the first 10 months of 2015 but could pick up in the coming months because of the increasingly severe El Niño and the weakening of the peso, which has fallen by 5% against the US dollar in the year to mid-November," the publication said.
ADB noted that still, inflation to date has been milder than expected, prompting downward revisions to the 2015 forecast.
The ADB report said that the agency is maintaining its GDP growth across Southeast Asia, projected at 4.4% in 2015 and 4.9% in 2016.
Inflation projections for Southeast Asia are revised down slightly to 2.8% from 3% for 2015, and to 3.3% from 3.2% for 2016, because of downward revisions for several economies.
The ADB also said that Asia’s developing economies remain on track to post growth of 5.8% in 2015 and 6% in 2016, as the region’s economies remain resilient to continued economic weakness in industrialized countries.
“Although we have seen some softening in a number of economies, the broader regional outlook is for continued steady growth,” ADB chief economist Shang-Jin Wei said.
He added that the region’s growth is supported by vibrant private consumption in the People's Republic of China and expanded industrial production in India and other countries.
"At the same time, countries reliant on commodities are hurting from the global slump in prices, and the slower-than-expected recovery in the US and economic contraction in Japan will continue to weigh on export prospects,” he added. – Rappler.com