Growth across the ASEAN 5, which includes the Philippines, is forecast from last year’s estimated output of 5.5 percent to around 4.6 percent, according to the International Monetary Fund (IMF) in the July edition of the World Economic Outlook (WEO).
This was marginally higher than in the April WEO when the five-nation Southeast Asian economies were collectively projected to grow by 4.5 percent in terms of the gross domestic product (GDP).
The IMF said the global economy as a whole is slowing down from last year’s estimated output of 3.5 percent to only 3 percent this year as countries grapple with rising prices and central banks that include the Bangko Sentral ng Pilipinas (BSP) endeavor to tamp it down without having to stifle growth.
“Compared with projections in the April 2023 WEO, growth has been upgraded by 0.2 percentage point for 2023, with no change for 2024. The forecast for 2023–24 remains well below the historical (2000–19) annual average of 3.8 percent. It is also below the historical average across broad income groups, in overall GDP as well as per capita GDP terms,” the IMF said.
The WEO in July also recalibrated global inflation to be marginally better than in the April forecasts as last year’s estimated inflation of 8.7 percent is seen moderating to 6.8 percent and only 5.2 percent next year.
The WEO in April estimated last year’s global inflation at 8.7 percent but should slow to around 7 percent this year.
The IMF noted that inflation is easing across most countries although the rates remain high.
“Following the buildup of gas inventories in Europe and weaker-than-expected demand in China, energy and food prices have dropped substantially from their 2022 peaks, although food prices remain elevated. Together with the normalization of supply chains, these developments have contributed to a rapid decline in headline inflation in most countries.
“Core inflation, however, has on average declined more gradually and remains well above most central banks’ targets. Its persistence reflects, depending on the particular economy considered, pass-through of past shocks to headline inflation into core inflation, corporate profits remaining high, and tight labor markets with strong wage growth, especially in the context of weak productivity growth that lifts unit labor costs,” the IMF said.
In the Philippines, the IMF forecast the rate at which prices change across the $404 billion Southeast Asian economy averaging only 5.5 percent this year, lower than forecast inflation in April averaging 6.3 percent.
Headline inflation the past six months in the Philippines average 7.2 percent but seen slowing to only 3.2 percent by next year, the IMF said.
