Fitch Solutions downgrades PH economy outlook to 0.5% growth

Fitch Solutions has downgraded its outlook on the Philippine economy, warning that the country is now on the cusp of recession.

The firm now forecasts full-year growth at a mere 0.5% for 2020, a significant drop from their previous 4.0% projection.

This bearish outlook is attributed to the prolonged government-imposed lockdown measures and global economic challenges.

The extended enhanced community quarantine in Metro Manila and other high-risk areas, set to last until May 15, is expected to bring domestic activity to a near standstill.

Fitch Solutions anticipates a slow recovery in the third quarter of 2020 as containment measures are gradually eased.

The souring global growth outlook, with both the US and China reporting economic contractions in Q1 2020, further contributes to the Philippines' precarious economic position.

A weak first-quarter growth report, expected on May 7, could potentially push the economic outlook into contraction territory.