PH ’21 economic growth forecast upgraded

Think tank Japan Center for Economic Research (JCER) has upgraded its 2021 growth forecast for the Philippines to 4.7 percent with more productive sectors of the economy having reopened and mass vaccination now in full swing.

JCER’s short-term economic forecasts for China and Association of Southeast Asian Nations (Asean)-4 released on Wednesday showed its updated Philippine growth projection was higher than 3.2 percent previously. However, the latest estimate remained below the government’s 5-5.5 percent gross domestic product (GDP) growth target for 2021.

JCER was also less optimistic than the private-sector economists it had polled, which have a higher consensus 2021 GDP growth forecast of 5.1 percent.

Slower Q4 expansion

Following the surprise 7.1-percent year-on-year growth posted in the third quarter, JCER estimated fourth-quarter expansion at a slower 4.2 percent.

JCER expected the fourth-quarter output to be 1-percent bigger than the third quarter’s, a slower pace of quarter-on-quarter expansion compared to the July-to-September period’s 3.8-percent increase from April to June GDP.

The Philippines’ GDP growth in 2021 would be faster than JCER’s forecasts of 3.2 percent in Indonesia, 2.2 percent in Malaysia and 1.3 percent in Thailand. Unlike its rosier expectations for the Philippines, JCER slashed this year’s growth projections for the three other Asean countries.

For 2022, JCER projected 7-percent GDP growth, at the lower end of the government’s 7-9 percent target. JCER’s latest growth forecast for next year, however, was downgraded from 7.4 percent previously.

Quarterly projections

Per quarter, JCER expects 5-percent growth in the first quarter of 2022; 8.7 percent in the second quarter, which will cover the 2022 elections in May; 6.9 percent in the third quarter; and 7.1 percent in the fourth quarter of next year.

JCER noted that across Asean-4, “economic and social activities have been gradually recovering as the vaccination accelerates and the relaxation of lockdown measures proceeds.”

Asean-4’s economy “will improve due to the rebound of private consumption and external demand,” JCER said. It forecasted the four countries’ average growth to hit 2.9 percent this year, 5 percent next year and 4.3 percent in 2023.

For the Philippines, JCER projected 4.9-percent GDP growth in 2023, lower than the government’s target range of 6-7 percent.

Last Monday, JCER said in a separate report that economists watching the Philippines have become more bullish about growth prospects for 2022 on the back of the upcoming presidential elections.

JCER quoted local analysts saying the rebound in spending would also put the economy on a more solid footing in 2022.These same analysts said household spending looks to be on a solid rebound as growth remained strong even amid the lockdowns imposed, elevated consumer prices and high unemployment numbers.