A surge in COVID-19 cases, prompting the government to impose localized lockdowns anew to contain the spread of the virus, paints a dark picture of the future of the Philippine economy, according to a London-based think tank.
In its weekly brief, Capital Economics has downgraded its gross domestic product outlook for the Philippines to 9.5 percent from its previous estimate of 11 percent due to the worsening virus situation.
Inflation for the year is seen to likely settle at 3.8 percent, higher than the 2.6 percent recorded last year.
Gareth Leather, senior economist for Asia, said, “This would leave the economy over 12 percent smaller than its pre-crisis trend by the end of the year – by far the biggest gap in the region.”
Over the past week, average new infections in the country increased at the highest pace since September 2020.
He added, “A growing proportion of positive test results suggest more cases are now going undetected.”