MANILA — The International Monetary Fund (IMF) said stronger domestic consumption in the Philippines, boosted by low oil prices, will continue to fuel the economy’s expansion.
It recently revised upwards its growth projection for the economy to 6.7 percent from 6.6 percent previously.
For 2016, its growth forecast for the domestic economy is 6.3 percent.
These forecasts are, however, lower than the government’s seven to eight percent target for this and next year.
In its World Economic Outlook (WEO), the lender forecasts Asia to still lead global growth, even as growth momentum has slowed a bit.
It eyes a 5.6 percent growth for Asia this year and 5.5 percent in 2016.
For ASEAN-5, which is comprised of Indonesia, Thailand, Malaysia, Philippines and Vietnam and are the five biggest economy in the Association of Southeast Asian Nations, growth is seen to hit 5.2 percent this year and 5.3 percent next year.
”Asia’s growth is forecast to hold steady in 2015, and the region is expected to continue outperforming the rest of the world over the medium term,” the WEO said.
In 2014, ASEAN-5 registered a growth of 4.6 percent.
The report cited that while growth in China, the world’s second largest economy to date, “is shifting to a more sustainable pace, growth is projected to pick up elsewhere in the region.”
In the first quarter of this year, China posted a seven percent year-on-year domestic expansion, slower than quarter-ago’s 7.3 percent and the slowest in the last six years.
In 2014, its growth slowed to 7.4 percent from year-ago’s 7.7 percent.
Amid the moderating growth of the Chinese economy, the lender said expansion in other Asian countries is seen to remain robust due to lower prices of oil in the international market, improvement of external demand and accommodative financial conditions.
”Risks are two sided, but downside risks dominate,” the report said.
Shocks are seen to come from high household debt and corporate debt in the U.S., which runs against the higher real interest rates and strong dollar, it said.
It warned that “growth risks from the within the region are also on the rise, and realignments of the major reserve currencies could create an uncomfortable trade-off between financial stability and competitiveness.”
”Policymakers should maintain prudent frameworks and build buffers to enhance resilience, and implement reforms to support demand rebalancing and relieve bottlenecks to growth,” it added.