The International Monetary Fund (IMF) has slashed its growth projections for the Philippine economy this year amid weak state spending, which stunted the country’s performance in the first quarter.
Shanaka Jayaneth Peiris, IMF resident representative in Manila, said weak global demand for exports from countries like the Philippines as well as the effects of dry weather on the agricultural sector would be a drag on the economy’s prospects.
For 2015, the IMF said it expected Philippine gross domestic product (GDP) rising by 6.2 percent, before accelerating to 6.5 percent in 2016. The expected acceleration in 2016 is contingent on the government’s ability to raise spending, particularly in key areas such as infrastructure, healthcare and education.
Released Thursday evening, the new numbers compare with projections made in April that said growth would hit 6.7 percent this year and 6.3 percent next year.
The government is targeting GDP growth of at least 7 percent in 2015 and 7.5 percent in 2016. Last year, growth stood at 6.1 percent, falling short of the targeted 6.5 percent.
“The first-quarter 2015 slowdown was due mainly to temporary factors, including the effects of dry weather on agricultural production, weak global demand and slow budget execution,” Peiris said in an e-mail to the Inquirer.