Country Economic Forecasts - Philippines
Consumers have become pessimistic about Q3 2018 for the first time after eight consecutive quarters of positive views. Indeed, good news has been scarce for the economy, with inflation rising to 6.4% in August (the highest since 2009), the peso falling to 54 to the US$ in the past week, the current account returning to deficit in Q2 and the stock market entering bearish territory. The official growth target of 7-8% now looks even more elusive. We still forecast growth of 6.4% before a slowdown to 6% in 2019. And with inflation rising, the central bank will probably be more aggressive; we expect it to raise interest rates at a faster pace, by at least 50bp by the end of the year and another 125bp in 2019.
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