Fitch Solutions Lowers Economic Projections to 5.3% for PH

As the global pandemic continues to devastate the country, Fitch Solutions has cut its economic growth forecast for the Philippines in 2021 to 5.3% from 5.8%.

“We at Fitch Solutions believe the Philippines economy will continue to struggle amid its difficulties controlling the spread of Covid-19 and normalising economic activity,” said the research firm.

The revised outlook still falls below the government’s own economic growth target for this year at 6.5-7.5%.

Fitch Solutions has also pointed out how the currently localized lockdowns in Metro Manila and nearby provinces — collectively known as NCR+ — affect the country’s economy.

“This will weigh substantially on economic activity in (the second quarter of 2021) and reflects the risks to the Philippines’ growth outlook over the coming quarters,” said the company, also highlighting the country’s slow vaccination rollout programs.

Around 1.95 million Filipinos have been inoculated so far against COVID-19 according to the latest government data. In retrospect, this is still a meager number compared to the country’s population of 108 million.

Fitch Solutions further attributes its forecast changes to the country’s continued economic recession and unlikely recovery of the employment situation.

“With a retightening of Covid-19 restrictions in late-March, it remains highly unlikely the economy will improve in the next quarter, meaning the recovery will be stalled once again,” Fitch Solutions explained.

The research firm has also downscaled its economic growth forecast for the country in 2022, which was lowered to 6.5% from the earlier 8.2%. These figures likewise fall below the government’s 8-10% target range.

“We have revised down our outlook for the following year as well, given our expectations for Covid-19 to continue to disrupt activity at least” until the first half of 2022, said the company.

SOURCE: CNN PH