The International Monetary Fund (IMF) forecasts that the Philippines will achieve the second-fastest economic growth in Asia this year and in 2025. In its latest World Economic Outlook report, the IMF maintained its gross domestic product (GDP) growth forecast for the Philippines at 6% for this year and 6.2% for 2025.
If these forecasts hold, the Philippines would see the second-fastest growth among selected Asian economies, trailing only India, which is projected to grow at 7.5% in GDP.
The Philippines’ 2024 growth forecast surpasses those of China (5%), Indonesia (5%), Malaysia (4.4%), Kazakhstan (3.5%), and Iran (3.3%), according to the IMF. It also exceeds projections for Thailand (2.9%), Egypt (2.7%), Korea (2.5%), Pakistan (2%), Saudi Arabia (1.7%), and Japan (0.7%).
“Asia’s emerging market economies remain the main engine for the global economy,” stated Pierre-Olivier Gourinchas, IMF’s economic counsellor and director of research.
Globally, the IMF has maintained its growth projections at 3.2% for 2024 and 3.3% for 2025, showing little change from previous forecasts. However, the growth forecast for the United States has been adjusted downward to 2.6% for this year, with the 2025 estimate remaining at 1.9%.
Growth projections for emerging markets and developing economies have been revised upward, driven by robust activity in Asia, particularly China and India. The IMF now expects emerging markets and developing Asia to grow by 5.4% this year and 5.1% in 2025.
China’s growth forecast for this year has been raised to 5%, fueled by a rebound in private consumption and strong exports in the first quarter. However, growth is expected to decelerate to 4.5% next year and continue slowing to 3.3% by 2029 due to aging and declining productivity growth.
Despite these positive outlooks, the IMF warned of risks such as inflation, geopolitical tensions, and potential financial instability due to high interest rates. The IMF noted that persistent inflation could lead to prolonged higher interest rates, increasing external, fiscal, and financial risks. Additionally, a strong US dollar and higher borrowing costs could impact growth and financial stability if fiscal improvements do not mitigate these challenges.
During its last policy meeting, the US Federal Reserve kept interest rates steady at 5.25% to 5.5%. New projections from policymakers indicate a reduction in expected rate cuts this year from three to just one.
Source: IMF