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ASEAN + 3 reduces economic growth forecasts



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REUTERS

Z Reicelene Joy N. Ignacio, Reporter

The Macroeconomic Research Office of ASEAN + 3 (AMRO) has downturned Philippine economic growth forecasts to 6.5% in relation to the previous estimate of 6.6% in May, compared to July Monthly update of the regional economic perspective ASEAN + 3 published on Tuesday, which showed that the projection remained at 6.3% in 2019, but fell from 6.4% in May.

"AMRO has corrected forecasts of GDP growth (GDP) in the Philippines, which slightly decreased to 6.3% for 2019 and 6.5% for 2020 due to deeper global growth prospects and a sharp decline in the first quarter in 1995 in the Philippines economy, "AMRO chief economist Hoe Ee Khor said in an e-mail.

"The GDP growth rate in the country fell to 5.6% in the first quarter of 2019, the lowest rate since the first quarter of 2015, partly due to the delay in approving the budget, which, in addition to limiting external demand, restrained government spending," Khor added .

"In the future, economic growth is expected to grow considerably as the government began to increase spending and facilitate monetary policy."

For the entire ASEAN + 3 region, which brings together 10 members of the ASEAN, as well as China, Japan and Korea, AMRO has reduced its projection of economic growth to 4.9% for this year and 2020, from projections of 5.1% and five percent, due to "persistent weaknesses in production and exports".

Asked what AMRO expects from the Philippines in the second half of President Rodrigo R. Duterte's six-year term, Mr. Khor replied: "The Philippine economic growth is about to intensify."

"Spills from US-China trade conflicts to the Philippines economy may not be relevant. However, the further escalation of trade conflicts could lead to a harsher global slowdown that could slow down the economic growth of the Philippines, "he said.

"In this context, the focus of the policy must be more focused on supporting growth, while at the same time avoiding a threat to macro stability. The government should continue the reform program in order to continue to increase its growth potential.

AMRO – originally set up as a company in April 2011 and transformed into an international organization in February 2016 – carries out macroeconomic surveillance and supports the implementation of the Multilateralization of Chiang Mai Foreign Exchange Swap, which has 10 ASEAN members, as well as China, Japan and South Korea, to help prevent any financial cramp.

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