The Philippine economy is one of the most dynamic in Asia. After years of strong growth, the country is now facing some headwinds. Inflation is rising and the current account deficit is widening. The peso has also come under pressure, depreciating by around 4% against the US dollar since the start of the year.
Despite these challenges, the Philippine economy is still expected to expand by around 6% in 2018. This is thanks to strong domestic demand, which is being driven by population growth and rising incomes. Investment is also expected to remain robust, supported by the government’s infrastructure spending plans.
Looking longer-term, the outlook for the Philippine economy is positive. The country’s young population and fast-growing middle class are expected to drive strong growth in the coming years. Moreover, the government is committed to reform, which should help to boost competitiveness and attract even more investment.
In the near-term, though, the Philippines will need to navigate the challenges posed by inflation and the current account deficit. If it can do so successfully, then the country is well-positioned for continued strong growth in the years ahead.
