The Philippine economy is poised for a strong rebound in 2024, with the International Monetary Fund (IMF) projecting a 6% growth rate despite global economic challenges. This optimistic outlook comes after a recent visit by an IMF team to Manila, where they assessed the country’s economic performance and future prospects.
Led by Elif Arbatli Saxegaard, the IMF mission found that the Philippines has shown remarkable resilience in the face of external pressures and tightened monetary policies. While growth moderated to 5.5% in 2023 due to global shocks and inflationary pressures, the economy is expected to gain momentum in the coming years.
The IMF’s growth forecast for 2024 is buoyed by expectations of stronger consumer demand, increased public and private investments, and a recovery in exports. Looking further ahead, the Fund projects an even more robust 6.2% growth in 2025.
On the inflation front, the outlook is equally promising. After peaking at 6% in 2023, inflation is expected to ease to 3.4% in 2024, falling within the central bank’s target range[4]. This decline is attributed to lower commodity prices and recent government measures to mitigate food price increases.
However, the IMF cautions that risks remain, particularly from geopolitical tensions and volatile commodity prices. To address these concerns, the Bangko Sentral ng Pilipinas is advised to maintain a restrictive monetary policy stance to keep inflation expectations firmly anchored.
The IMF team also noted the government’s ongoing fiscal consolidation efforts, albeit at a slower pace than initially planned. They emphasized the importance of revenue mobilization to support inclusive growth and strengthen debt sustainability.
As the Philippines continues its economic recovery, the IMF’s assessment highlights both the country’s resilience and the challenges that lie ahead. With careful policy implementation and a focus on structural reforms, the nation appears well-positioned for sustained growth in the coming years.
Image Credit: IMF flickr