The International Monetary Fund (IMF) has revised its forecast for the Philippine economy upwards as improving conditions in rich countries drive stronger demand for the nation’s exports.
The multilateral lender now sees the Philippine economy growing by 6.3 percent this year.
While this is slower than the fund’s projected 6.8-percent growth for gross domestic product (GDP) for 2013, the forecast is better than the previous outlook of 6 percent.
“This is due to the better outlook for advanced economies,” IMF Resident Representative Shanaka Jayaneth Peiris said.
The better forecast for the Philippines followed the release of the IMF’s updated World Economic Outlook, which showed growth in Southeast Asia improving to 5.1 percent this year from 5 percent in 2013.
The IMF’s 2014 forecast for the Philippines is slower than the government’s target of a growth of 6.5 to 7.5 percent. Peiris said growth this year would be affected by negative “base effects” caused by the record expansion in 2013.
He said tighter financial conditions, caused by the repatriation of capital from emerging markets to developed economies, might also lead to a slowdown in both public and private construction, which has been major growth driver for the economy in the last three years.
Peiris said slower economic activity in regions affected by Super Typhoon Yolanda would also contribute to the slower growth in 2014.