GlobalData scales down 2022 Philippine growth forecast

MANILA, Philippines — Data and analytics company GlobalData has trimmed its forecast for Philippine economic growth this year, but the country is expected to be among the fastest growing economies in the Asia Pacific (APAC) region.

In a statement, GlobalData said the Philippine economy is expected to expand by 6.7 percent this year.

Earlier, GlobalData said it expects the Philippine economy to grow by seven percent this year.

GlobalData’s new forecast is still within the government’s revised 6.5 percent to 7.5 percent gross domestic product (GDP) growth target for this year.

Earlier, the Development Budget Coordination Committee, which crafts the country’s macroeconomic assumptions, set a seven to nine percent GDP growth goal for this year, but this was lowered to seven to eight percent in May due to risks from external factors, such as Russia’s invasion of Ukraine, production slowdown in China, as well as the policy normalization by the US Federal Reserve.

While the forecast for GDP growth has been downscaled, GlobalData said the country is expected to post the second fastest growth in the APAC region this year, next to India which is seen to rise by 6.8 percent.

The new forecast for the Philippines comes as GlobalData revised downward its 2022 growth forecast for the APAC regional economy to 3.9 percent from 4.7 percent, previously.

GlobalData sees growth in APAC slowing down from its previous estimate due to China’s zero-coronavirus disease policy.

“Since other economies in APAC are closely intertwined with China through trade, a slowdown in China is expected to impact the regional economic growth prospects,” Puja Tiwari, economic research analyst at GlobalData said.

Tiwari said GlobalData forecasts China’s economic growth rate to slow down to 4.1 percent this year from 7.8 percent last year.

Apart from the slowdown in China, GlobalData also cited the impact of the conflict between Russia and Ukraine, and tight monetary conditions in revising the growth forecast for APAC.

In terms of how a possible recession in China and US would affect the country’s economic growth, Socioeconomic Planning Secretary Arsenio Balisacan said the impact may be positive because that would lower the demand for oil.

“Of course, the negative implication of that is the demand for exports will be less. But on the other hand, if you look at the sources of growth, you find that domestic consumption, including investment represent a huge chunk of our GDP,” he said, adding such could dampen the negative effects of the potential China and US recession.