PH ’21 economic growth forecasts revised upwards
Think tank Japan Center for Economic Research (JCER) has raised its 2021 growth forecast for the Philippines to 4.7%, as the most productive sectors of the economy have reopened and mass vaccination is now in full swing.
JCER’s short-term economic forecast for China and the Association of Southeast Asian Nations (Asean) -4 released on Wednesday showed its updated growth projection in the Philippines to be above 3.2% previously . However, the latest estimate remained below the government’s target for gross domestic product (GDP) growth of 5-5.5% for 2021.
The JCER was also less optimistic than the private sector economists it interviewed, who have a consensus 5.1% higher GDP growth forecast for 2021.
Slower expansion in the fourth quarter
After the surprising 7.1% year-on-year growth recorded in the third quarter, JCER estimated the expansion in the fourth quarter to be a slowdown of 4.2%.
JCER expects fourth quarter production to be 1% higher than third quarter production, a slower pace of quarter-over-quarter expansion compared to the 3.8% increase in GDP from July to September from April to June.
The Philippines’ GDP growth in 2021 would be faster than the JCER forecast of 3.2% in Indonesia, 2.2% in Malaysia and 1.3% in Thailand. Contrary to its more optimistic expectations for the Philippines, JCER reduced this year’s growth projections for the other three ASEAN countries.
For 2022, the JCER forecast GDP growth of 7%, below the government’s 7-9% target. However, JCER’s latest growth forecast for next year has been revised down from 7.4% previously.
Quarterly projections
By quarter, JCER expects growth of 5% in the first quarter of 2022; 8.7% in the second quarter, which will cover the 2022 elections in May; 6.9% in the third quarter; and 7.1 percent in the fourth quarter of next year.
JCER noted that throughout Asean-4, “economic and social activities have gradually recovered as vaccination accelerates and the easing of lockdown measures continue.”
Asean-4’s economy “will improve due to the rebound in private consumption and external demand,” JCER said. He predicted that the average growth of the four countries would reach 2.9% this year, 5% next year and 4.3% in 2023.
For the Philippines, JCER forecast GDP growth of 4.9% in 2023, below the government’s target range of 6-7%.
Last Monday, JCER said in a separate report that economists watching the Philippines have become more optimistic about the growth prospects for 2022 following the upcoming presidential elections.
JCER cited local analysts as saying that the spending rebound will also put the economy on a more solid footing in 2022. Those same analysts said household spending appeared to be on a solid rebound as growth remained strong even in the middle. lockdowns imposed, high consumer prices and unemployment figures.
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