Think tank Japan Center for Economic Research (JCER) has projected a bigger slide in the Philippines’ gross domestic product (GDP) this year and a slower recovery to growth next year amid a still weak consumer spending.
JCER’s latest forecasts for China and the Asean-4 showed a less rosy outlook specifically for the Philippines, with the local economy now projected to shrink by a record 9.7 percent in 2020 from the previous forecast of a 7.7-percent contraction.
Following an average 10-percent drop during the first three quarters, JCER sees fourth-quarter GDP sliding by 8.9 percent year-on-year, albeit 5-percent bigger compared to the third-quarter outturn.
For 2021, JCER projected GDP to still shrink by 2.3 percent during the first quarter before reverting to a growth of 15.4 percent in the second quarter, 7.6 percent in the third quarter, and 3.6 percent in the fourth quarter.
As such, JCER expects the Philippines’ GDP growth at 5.9 percent next year, below its previous forecast of an 8.1-percent expansion and outside the government’s target range of 6.5 to 7.5 percent.
Among the Asean-4, the Philippines’ projected GDP drop in 2020 would be bigger than the 5.8-percent decline in Thailand, 5.1-percent in Malaysia, and 1.7-percent in Indonesia.
Next year, the Philippines would also be lagging behind as its neighbors were seen to grow at faster rates of 9.8 percent for Malaysia, 7.3 percent for Thailand, and 7.2 percent for Indonesia.
In 2022, the Philippines’ GDP is expected to expand by 6.3 percent, while Malaysia’s, 6.2 percent; Indonesia’s, 7 percent; and Thailand’s, 7.9 percent.
Across the four economies, JCER said economic recovery so far was “still soft mainly due to sluggish private consumption.”
These Asean countries would post growth in 2021 and 2022, however, “because the exports to China will increase,” JCER said.
JCER expects China to grow by 2.2 percent this year, 9.4 percent next year, and 6.4 percent in 2022.
In China, “a solid recovery of private consumption is observed thanks to improvements of employment and income environment,” JCER said. INQ