Economy To Improve In 2019 While Elections Pose Risks According To An Analyst
According to an analyst, the Philippines’ economic fundamentals will improve this year against the backdrop of uncertainty due to the mid-term elections. In addition, the peso will stabilize against the dollar and there will be “some slowdown” in inflation even as the headline growth rate will slow compared to 2018. Anwita Basu, a senior economist at The Economist Intelligence Unit shared her views in an interview in ANC’s Early Edition.
Domestic demand will remain strong and the government is expected to maintain fast disbursements to buoy the economy. She also noted that some reforms that the government has already pushed through will improve the fiscal situation, but its’ a combination story of rising political risk. The result of the midterm vote will be very significant for investors as its effect towards President Rodrigo Duterte’s leadership in the last 3 years in office is their main concern.
The Bangko Sentral ng Pilipinas (BSP) could raise interest rates by 50 to 75 basis points more this year, after a cumulative 1.75-point increase in 2018. It kept the benchmark steady during its last policy meeting. In the US, the Federal Reserve will likely slow its interest rate hiking pace, which will bring relief to emerging markets, she said.