NextGen Day

The International Monetary Fund has kept its growth prediction for the Philippines for this year, citing Omicron-related interruptions that are expected to fade.

According to Ragnar Gudmundsson, IMF resident representative to the Philippines, the domestic economy will grow at 6.3 percent this year, unchanged from its forecast in October last year. The IMF’s newest World Economic Outlook report, released Tuesday night, took this forecast into account.

If realized, this year’s gross domestic product growth will be higher than the IMF’s forecast of 4.6 percent for 2021. On Thursday morning, the Philippine Statistics Authority will issue the official GDP numbers for 2021.

“In 2022, the Philippine economy is expected to increase at a rate of 6.3 percent.” “The carryover from the positive growth revision in 2021 is likely to be balanced out in the first quarter of 2022 by the quick spread of the Omicron variety and new quarantine measures,” Gudmundsson said in an e-mail.

“Strong growth is predicted for the rest of 2022,” he wrote, “as vaccination progresses, governmental measures remain adequately supportive, and private sector confidence rises.”

The fund’s fears about the Omicron variant’s economic impact are reflected in its pessimistic outlook for the global economy. Due to “impediments” triggered by the newest epidemic, the crisis lender lowered its global GDP prediction for 2022 to 4.4 percent, half a point lower than the October estimate. However, those “impediments” are likely to dissipate in the second quarter of the year.

The IMF warned in its quarterly update that “the global economy enters 2022 in a weaker position than previously envisaged,” and that “the appearance of the Omicron variant in late November threatens to set back this tentative route to recovery.”

The forecast is nonetheless fraught with dangers, such as geopolitical tensions and a wave of price hikes affecting consumers and businesses that are projected to endure longer than predicted.

Despite the assault of Delta variation at the time, the economy grew by 6.9% (reduced lower) in the third quarter of last year, according to the latest government figures. After replacing draconian lockdowns with “granular” ones that simply restrict mobility in regions with high infection rates, the government revised its pandemic strategy.

The government’s growth forecast for 2021 has been raised to 5-5.5 percent, based on the better-than-expected GDP performance. According to the Philippine government, the economy will increase 7-9 percent in 2022, and 6-7 percent in 2023 and 2024.

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