The regional macroeconomic surveillance organization Asean+3 Macroeconomic and Research Office (Amro) has cut its 2020 growth forecast for the Philippines to 4.5 percent as the entire region reels from the economic fallout of the COVID-19 pandemic.
Across Asean+3, which includes China, Japan and South Korea, regional growth was expected to drop to 2 percent this year from a 4.8-percent expansion last year.
“Just as we were closing the 2019 chapter on a brighter note with the conclusion of the US-China phase one trade negotiations, geopolitical tensions in the Middle East flared up, driving up oil prices. No sooner had this subsided, the ‘black swan’ COVID-19 virus broke out in China and turned into a global pandemic,” Amro chief economist Hoe Ee Khor said in a statement on Tuesday.
“Europe and the United States are expected to go into recession just as the outbreak subsides in China and [South] Korea. As a result, China’s economic recovery will be much weaker at 3.5 percent in 2020” from 6.1-percent growth last year, Khor said.
“Asean countries are experiencing a surge in the COVID-19 infection and governments have taken very strict measures—including national lockdowns—to contain the outbreak, and adopted large stimulus packages to support their economies,” Khor added, such that Amro expected a sharp weakening in growth across the 10 member countries to average 1.1 percent this year from 4.6 percent in 2019.
In the case of the Philippines, Amro’s newest forecasts that took into consideration the ongoing pandemic projected gross domestic product (GDP) growth this year within the range of 4-5 percent, below the government’s 6.5-7.5 percent goal.
In March, Amro forecasted the Philippines’ GDP expansion for 2020 at a faster 6.2 percent, but this rosier projection had been overtaken by the spread of the COVID-19 wrecking havoc on economies worldwide.
In Amro’s Asean+3 Regional Economic Outlook (Areo) 2020 report, which incorporated economic developments before March 16, it noted that during the short term, “the main risks facing the [Philippine] economy stem from external sources.”
During the live-streamed launch of the Areo 2020 report also on Tuesday, Khor said that the Philippines was among the Asean+3 economies whose tourism revenues would be badly hit by the COVID-19 pandemic, as the sector accounted for about a fourth of domestic GDP. INQ