IMF slashes PH GDP forecast to -3.6%

The International Monetary Fund (IMF) has revised its economic outlook for the Philippines, now projecting a 3.6 percent contraction in the country's gross domestic product (GDP) for 2020.

This latest projection is a significant downgrade from the IMF's April forecast of a 0.6 percent GDP growth and is more pessimistic than the government's own estimates.

The IMF attributes this downward revision primarily to extensive supply chain disruptions caused by the COVID-19 pandemic and reduced demand from key international trading partners.

IMF resident representative Yongzheng Yang indicated that the resolution of the COVID-19 crisis is expected to be slower, leading to a more substantial and prolonged negative impact on economic growth than initially anticipated.

Despite the grim outlook for 2020, the IMF forecasts a strong rebound for the Philippine economy in 2021, with an projected expansion of 6.8 percent.

The stringent lockdown measures implemented in the Philippines in mid-March, which paralyzed a significant portion of the economy, are also cited as a contributing factor to the economic downturn.