June 24, 2022

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Economy to grow by 6% despite risks from Ukraine war, ADB says

2 min read
A silhouette of the skyline is pictured at sunset in Quezon City, Metro Manila, Philippines, Nov. 27, 2020. — REUTERS

THE ASIAN Development Bank (ADB) maintained its Philippine growth forecast for 2022, as domestic investment and consumption continue to improve amid looser lockdown restrictions, but it warned of risks from the Russia-Ukraine war.

In the Asian Development Outlook 2022, the multilateral lender said the country’s gross domestic product (GDP) is projected to grow by 6% this year, unchanged from the forecast given in December. It expects GDP to expand by 6.3% in 2023.

However, these projections are below the economic managers’ 7-9% target for 2022, and 6-7% goal for 2023. In 2021, the Philippine economy grew by 5.6%.

ADB keeps 2022 Philippine GDP growth forecast at 6%, expects 6.3% in 2023

“Nearly all indicators point to higher growth for the Philippines this year and in 2023, barring the impact of external factors from geopolitical tensions that may dampen growth globally, including in the country’s key export markets Europe and the United States,” ADB Philippines Country Director Kelly Bird said in a statement.

The government has moved to reopen the economy by loosening mobility curbs, ramping up coronavirus disease 2019 (COVID-19) vaccination, and easing international travel restrictions. Consumer and business confidence is growing as COVID-19 infections continue to decline.

At the Asian Impact Webinar on Wednesday, ADB Macroeconomic Research Division Director Abdul Abiad noted that there’s more economic activity as the government relaxed restrictions, which allowed domestic investment and consumption to rebound.

Mr. Abiad said the Philippine GDP outlook was unchanged due to the country’s relatively small trade and financial links to Russia and Ukraine.

“In terms of direct channels of impact, it’s not a lot. It will work primarily through inflation,” he said.

The ongoing Russia-Ukraine war is the biggest risk to the growth outlook, the ADB said, adding that “inflation could surge higher with…

Neil

2022-04-06 12:33:28

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