The Asian Development Bank (ADB) downgraded growth expectations for Developing Asia; yet, has not changed its 2019 and 2020 growth forecasts for the Philippines.
The finance institution retained the growth forecasts for 2019 and 2020 at 6 percent and 6.2 percent, respectively.
Back in September, the bank expected growth to accelerate in the fourth quarter of 2019 throughout 2020.
Growth is deemed likely because of anticipated infrastructure investments as Phil Star reported.
The ADB also expected domestic demand to grow because of accommodative fiscal and monetary policies.
In the third quarter, the country’s economic output did pose a growth of 6.2 percent, which brought the growth average for the first three quarters of 2019 at 5.8 percent.
Enforcement of the 2019 national budget, although delayed and belated, also led to a rebound in government expenditure. This supported the growth in the third quarter.
ADB’s anticipated growth for the Philippines this year does not deviate from the downgraded growth forecast of 6 percent to 6.5 percent that the Development Budget Coordinating Committee set.
The previous expectations were at 6 percent to 7 percent.
ADB Growth Forecasts of Asia More Pessimistic
The ADB, however, has a more tempered down expectations for the overall region, given what it perceives of China and India’s economies.
The bank slashed anticipated growth rates, given the respective economies’ external and domestic environments.
It expects GDP in the region to merely expand by 5.2 percent for both 2019 and 2020.
Back in September, the body made the higher forecasts of 5.4 percent and 5.5 percent for the next two years.
China Growth Is Questionable
Specifically, in China, the ADB thinks the growth will only reach 6.1 percent in 2019 and 5.8 percent in 2020.
These rates are downgrades from the previous expectations of 6.2 percent in 2019 and 6 percent in 2020.
The ADB thinks these rates reasonable given trade tensions and the global slowdown.
China also posted a weaker domestic demand.
According to ADB’s chief economist, Yasuyuku Sawada, growth rates are still stable in developing Asia.
However, it does no good to ignore persistent trade tensions in the region because these can affect the longer-term economic outlook.
The African swine fever also has increased pork prices significantly, and the institution cannot ignore its impact.
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