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WASHINGTON, D.C.—The International Monetary Fund (IMF) ruled out the likelihood for
emerging markets like the Philippines to post negative
or contracted growth along lines expected of developed
economies this year.
But it
warned countries with fairly large remittance flows and
export receipts that domestic output was likely to be
affected just the same.
“Economies like the Philippines, and also in Central
America, the Caribbean, perhaps in emerging Europe as
well, will be affected by slowing inflows from
remittances, in a similar way to slowing demand for
their export goods,” IMF deputy director for research
Charles Collyns said on Wednesday.
At a
briefing where Collyns and three other IMF officials
bared the broad outlines of the Fund’s World Economic
Outlook, he said, “[Emerging] market economies will not
suffer the sort of major downturn and even recessions
that have occurred during previous global business
cycles.”
“Overall, as we have said, we nevertheless believe that
the outlook for emerging economies is for a significant
slowdown but still leaving growth at fairly robust
rates,” Collyns said.
Bangko
Sentral ng Pilipinas Governor Amando Tetangco Jr. links
remittance growth to consumption activities, a key
driver of economic expansion in the country.
Remittances from millions of overseas Filipinos abroad
account for more or less 10 percent of local output or
the gross domestic product, and is seen to hit $16.4
billion this year, including those remitted outside the
banking system.
Olivier
Blanchard, economic counselor and director of research
at the IMF, also said they scaled back the forecast
global output next year to just 3 percent from previous
forecast in April of 3.5 percent.
“Now,
that number may not be so bad. It hides, however,
important differences between countries on one hand and
emerging and developing countries on the other,”
Blanchard stressed.
He said
growth in advanced economies “will be very close to zero
or even negative until at least the middle of 2009.”
The
other half of 2009 should show “a low recovery during
the rest of the year.”
“World
growth will be instead driven by growth in emerging and
developing economies. We predict that even emerging
markets will grow at a substantially lower rate than
they have in recent past,” he quickly added.
Forecast
global growth for emerging economies was seen at 7
percent this year and by only 6 percent next year.
For the
Philippines, the IMF said growth this year should slow
to 4.4 percent from earlier forecast of 5.2 percent.
According to Blanchard, the slower growth only means
that inflation pressures, which hit a 17-year high
recently in Manila, “will recede.”
“In
advanced economies the decline in oil and commodity
prices will bring down inflation pressures, freeing room
for macroeconomic policies.
“In many
emerging and developing countries, headline inflation,
which sometimes was high, is peaking.
“However, in some countries the underlying inflation
pressures are still a concern,” Blanchard said. |
