IMF retains Philippines growth outlook for 2024, 2025

MANILA, Philippines — The International Monetary Fund (IMF) has retained its growth prospects for the Philippines for this year and next amid challenging private consumption expansion in the country.

Based on the World Economic Outlook (WEO) released yesterday, the Washington-based multilateral lender kept its gross domestic product (GDP) assumption for the Philippines at 5.8 percent.

This was the same forecast the IMF gave the Philippines during the 2024 IMF Article IV consultation earlier this month.

While this is an improvement from last year’s 5.5 percent expansion, it falls below the six to seven percent growth assumption set by the Cabinet-level Development Budget Coordination Committee (DBCC).

The IMF said private consumption is going to grow slightly with less momentum. The sector’s growth during the first semester was lower than expected due to more expensive food prices.

Private consumption rose by 4.6 percent in the second quarter, slower than the 5.5 percent growth in the same period last year.

IMF’s growth forecast for the Philippines remains one of the highest in the region, next to Vietnam’s 6.1 percent.

This year, the Philippines is expected to grow faster than Indonesia, Thailand, Malaysia and even China.

Likewise, the IMF retained its 6.1-percent GDP assumption for 2025, also way below the 6.5 to 7.5-percent target of the economic team.

For inflation, the IMF also did not change its inflation forecast for the Philippines, which would ease to 3.3 percent this year and further to three percent in 2025.

The latest data showed that the September inflation eased to an over four-year low of 1.9 percent, even falling below the expectation of the Bangko Sentral ng Pilipinas.

The sharp reduction was primarily due to slower increases in the prices of food and non-alcoholic beverages, as well as transport and housing water, electricity, gas and other fuels.

In its report, the IMF noted that the global battle against inflation has essentially been won, even though price pressures persist in some countries.

However, the IMF also warned that downside risks to inflation are rising, specifically with the escalation in regional conflicts, monetary policy remaining tight for too long, growth slowdown in China and continued protectionist policies of some countries.