MANILA, Philippines — The Philippine economy is expected to grow at least five percent this year, still below government targets, as the pace of vaccination rollout and possibility of lockdown measures may dampen the much-needed recovery.
In its latest report, GlobalData, a leading data and analytics company in the UK, estimates that gross domestic product of emerging and developing economies will grow by an average of 6.3 percent.
Growth will be led by India at 9.4 percent despite an intense second wave of COVID-19 cases, and China at 8.61 percent.
The Philippines, on the other hand, will likely register at least five percent in economic growth, alongside other emerging economies in the region including Indonesia and Malaysia.
GlobalData’s forecast falls below the six to seven percent updated growth target set by the government. The Philippine economy is coming from a 9.6 percent contraction in 2020.
GlobalData economic analyst Gargi Rao said vaccination delays and premature withdrawal of fiscal support is likely to dampen the growth outlook in developing countries including the Philippines.
“Many developing countries are unable to make substantial progress in vaccine deployment due to less policy capacity to support economic activity compared to advanced economies,” Rao said.
“The possibility of a new variant emerging that challenges the effectiveness of the vaccines, such as the Delta variant, poses a significant risk to economic recovery,” she said.
In the Philippines, only 10.7 million doses have been administered since vaccination started in March.
About 2.5 percent or 2.7 million Filipinos have been fully vaccinated while those who were given at least one dose reached eight million or some 7.4 percent of the population.
As global economic recovery gains traction among advanced and emerging economies, Rao emphasized that governments should prioritize policies that facilitate smooth transition of labor across sectors, while also protecting the vulnerable, reducing trade costs and expanding access to digital connectivity.
“Governments need to continue fiscal and monetary support to aid more equitable vaccine deployment and embark on a sustainable green growth strategy,” she said.
Meanwhile, global GDP for 2021 is forecast to grow at 6.14 percent, with advanced economies expected to register a 5.15 percent expansion due to strengthening domestic and external demand.
Among the advanced countries, the UK is set to grow the fastest at 6.77 percent, followed by France and Germany at 5.84 percent and 3.46 percent, respectively.
The US, on the other hand, may see its fastest growth in more than two decades at 6.4 percent.
“Easing lockdown measures, progress in vaccination drives, easing of restrictions on cross-border movement and trade agreements are all expected to drive global economic growth in 2021,” Rao said.
However, daunting challenges in the form of rising inequality within countries, rising inflation rate along with high debt levels and crippled health sectors could hinder the recovery process,” she said.