IMF raises Philippine growth forecast to 6.5 percent

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Wednesday, March 26, 2014

MANILA -- The International Monetary Fund (IMF) raised Wednesday its 2014 economic growth forecast for the Philippines to 6.5 percent, up from its January projection of 6.3 percent, with typhoon reconstruction expected to boost the economy.

It forecasts 2015 growth at 6.5 percent, slightly lower than its 6.6 percent estimate in January. The economy grew 7.2 percent last year despite a string of calamities including Typhoon Yolanda (Haiyan) in November, and government has targeted growth of 6.5 to 7.5 percent this year and 7 to 8 percent next year.

An IMF statement at the conclusion of regular consultation with economic managers also said the need for easy monetary policies in the Philippines has waned because of a stronger global outlook.

Monetary authorities have kept interest rates at record lows to spur credit and spending.

IMF called last year's performance impressive, adding that "the economy is well positioned to absorb a gradual tightening of US financial conditions and to implement timely, measured action on the domestic front."

But it cited the need for a reduction in bottlenecks to investment and formal sector employment to encourage broader-based business activities and to allow the Philippine to realize its full potential for rapid, sustained and inclusive growth.

It said 2014 inflation was expected to moderate to 4 percent, a lower figure from the 4.4 percent it forecast in January. Last year's inflation rate was 3 percent and the government targets a 3 to 5 percent rate this year. (AP)

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