A report by ANZ Research said the current pace of economic growth in the country depends on how the government acts to control the pandemic and speed up its vaccination program.
WITH the further easing of restrictions and the fast pace of the government’s vaccination program, the Philippines may soon return to its pre-pandemic economic growth levels by the second half of next year.
In a report, ANZ Research, a unit of the Oceania Bank, said the Philippine economy is likely to rebound with a growth of 4.2 percent this year and 6.2 percent next year.
“These forecasts imply that the Philippines’ gross domestic product will rebound to its 2019 level only in the second half of 2022,” ANZ said.
The report also noted the slightly lower expectations of the country’s economic managers due to the resumption of the lockdowns imposed over the Philippines’ urban areas this year amid the threat of the more contagious Covid-19 Delta variant.
“High contagion rates and a slower vaccination progress than most of its regional peers characterize the current state of the Philippine economy. The underlying demand conditions, too, reflect weakness which means the recipe to recovery isnot yet in place as and when the health situation improves,” ANZ said.
The think tank also said the current pace of economic growth in the country depends on how the government acts to control the pandemic and speed up its vaccination program.
“There are also other challenges to address on the BSP’s part including ensuring efficient transmission of policy support at the targeted level. At present, there is sufficient liquidity but weak credit offtake,” ANZ said
Last Thursday, the BSP kept the benchmark interest rate at a record low of two percent for the seventh straight rate setting meeting to allow the economy to gain more traction and fully recover from the pandemic-induced recession.
However, it raised its inflation forecasts to 4.4 percent this year, 3.3 percent next year, and 3.2 percent in 2023.
Inflation averaged 4.4 percent from January to August, exceeding the upper end of the BSP’s two to four percent inflation target.
“However, we once again emphasize that supply-side disruptions, such as weather events and the climb in food prices caused by the African swine fever, underscore the current spike in inflation,” it said.
Tags: #Covid19, #economy, #economicrecovery, #ANZResearch