IMF projects PH economy to contract 8.3% in 2020

The International Monetary Fund (IMF) projects the Philippine economy to contract by 8.3% in 2020, the sharpest drop in Southeast Asia, due to the severe impact of the COVID-19 pandemic.

This revised forecast represents a significant downgrade from the IMF's previous projection of a 3.6 percent contraction in June.

The pandemic has severely affected consumer confidence and private investments, leading to prolonged community quarantine measures.

The IMF also anticipates the unemployment rate in the Philippines to surge to 10.4 percent in 2020, a substantial increase from 5.1 percent in 2019.

The Philippines experienced a record 16.5 percent year-on-year GDP drop in the second quarter, the period marked by the region's longest and strictest COVID-19 lockdown.

The IMF projects the Philippine economy to expand by 7.4% in 2021, helped by the base effect, an expected rebound in pent-up demand, and continued effects of policy easing in 2020.