IMF raises Phl

growth
forecast
By Kathleen A. Martin (The Philippine
Star) | Updated January 21, 2015 12:00am

MANILA, Philippines - The International

Monetary Fund (IMF) raised yesterday
its economic growth projections for the
Philippines for this year and the next
while cutting the global outlook,
saying the country will get a boost
from higher public spending and lower
oil prices.
The growth forecasts for 2015 and
2016 have been raised to 6.6 percent
and
6.4
percent,
respectively,
reflecting the boost from lower global
oil prices and anticipated pick up in
government spending from the low
base
in
2014,
IMF
resident
representative Shanaka Jayanath Peiris
said in an e-mail.
Both figures were higher than the
IMFs previous projections of 6.3

percent for 2015 and 6.2 percent for

2016 but below the governments
seven to eight percent goals for said
years.
For 2014, Peiris said the IMF
downgraded its economic growth
forecast for the Philippines

to 5.8 percent from

estimate of 6.2 percent.

previous

This is reflecting the outcome for the

first three quarters related to lower
agricultural output and government
spending, Peiris said.
Philippine economic growth eased to a
lower-than-expected 5.3 percent in the
third quarter of 2014 from 6.4 percent
in the previous three months, blamed
largely on lower public spending.
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This brought the nine-month GDP
growth to 5.8 percent, still below the
governments 6.5 to 7.5 percent target
for the year.
The fourth quarter and 2014 gross
domestic product data will be released
by the government next week.
The upward revisions for Philippine
economic growth was made parallel to

a cut in global output for this year and

the next on weaker economic activity
in China, Russia, the euro zone, and
Japan, as well as in some major oil
exporting countries.
In its latest World Economic Outlook
(WEO) Update released yesterday, the
IMF cut its projection for global output
to 3.5 percent for 2015 and to 3.7
percent in 2016. Both are 0.3

percent lower than the

announced in October.

forecasts

The IMF stressed the uncertainty

about oil price movements and the
timing of the rise of interest rates in
the US pose as risks to global growth.
On the upside, the boost to global
demand from lower oil prices could be
greater than is currently factored into
the projections, especially in advanced
economies, the IMF said.
But oil prices could also have
overshot on the downside and could
rebound earlier or more than expected
if the supply response to lower prices
is stronger than forecast, the IMF
said.
Bouts of volatility, meanwhile, remain
elevated in global financial markets,
the IMF said, adding a potential

trigger could be monetary policy

normalization in the US.

Emerging market economies are

particularly exposed, as they could

face a reversal in capital flows, the

IMF said.