The International Monetary Fund has kept its 2012 growth forecast for the so-called “Asean 5” countries, which includes the Philippines, even as it marginally cut its global economic growth projection amid perceived worsening of the economic condition in the eurozone.
In its latest World Economic Outlook (WEO) report released Monday, the IMF said its average growth forecast for the Asean 5 remains at 5.4 percent for this year.
The multilateral funding agency includes in the Asean 5 the Philippines, Indonesia, Malaysia, Thailand and Vietnam, which are, in turn, part of the 10-member Association of Southeast Asian Nations.
For the world economy, its growth forecast for the year was reduced to 3.5 from an earlier projection of 3.6 percent made in April. This took into account escalating problems in the euro area, where sovereign debt problems are being compounded by financial woes of its banking sector, and sluggish performance of the United States’ economy.
The IMF now expects the US to grow by just 2 percent this year from its earlier forecast of 2.1 percent. On the eurozone, the IMF still sees it contracting by 3 percent this year.
The IMF said recent interest rate cuts implemented by central banks in emerging markets, such as the Philippines, will help cushion the adverse impact of a potentially worse condition in the eurozone.
It said, however, that emerging economies should exercise flexibility in case additional measures may be required if the impact of external shocks escalates.
“In emerging and developing economies, policymakers should stand ready to adjust policies, given spillovers from weaker advanced economy prospects and slowing export growth and volatile capital flows,” the IMF said in the report.
The move of the IMF to keep its growth forecast for 2012 for the Asean 5 is consistent with the consensus projection that the region will manage to keep a decent growth rate even with the drag caused by problems in the eurozone.
Meantime, for 2013, the IMF sees Asean 5 growing by a faster rate of 6.1 percent as a gradual improvement in the global economy is seen improving appetite for their exports. The 2013 projection for the Asean 5, however, was lower than the original forecast of 6.2 percent.
Moreover, the world economy is seen accelerating to 3.9 percent in 2013 as the impact of stimulus measures being implemented in advanced economies is expected to have kicked in by then. The figure, however, is lower than the original 2013 growth projection of 4.1 percent for the world economy.
The IMF said emerging markets are seen growing by decent rates, but are not totally immune from the effects of problems in the US and the eurozone.
In the US—which is a key export market for the Philippines—recovery from the 2009 recession remains slow. The eurozone, another main export destination, has yet to manifest its debt woes, it added.