The International Monetary Fund (IMF) slashed its growth forecast for the Philippines this year to -8.3 percent as it noted deeper contraction in the second quarter of the year.
The lender’s latest growth projection for the country this year is a decline from its -3.6 percent projection earlier.
IMF Country Representative to the Philippines Yongzheng Yang said the change in the growth projection for this year was due to the “larger-than-expected downturn in Q2 (second quarter) and a more gradual resolution of the pandemic as witnessed over the past months, with prolonged social distancing.”
Growth, as measured by gross domestic product (GDP), registered a deeper contraction in the second quarter at 16.5 percent from the downwardly revised -0.7 percent in the previous three months.
The second-quarter output resulted in the change in economic managers’ growth target for this year from between -2.0 to -3.4 percent to -5.5 percent.
However, IMF hiked its 2021 forecast to 7.4 percent which is an improvement from 6.8 percent. Next year, economic managers target a recovery of between 6.5 to 7.5 percent, down from 8 to 9-percent target earlier.
The 2022 target is also between 6.5-7.5 percent.