IMF sees RP growth at 3%

IMF sees RP growth at 3%

WASHINGTON, July 9 (AFP) - The IMF on Monday forecast economic growth in the Philippines this year of three percent -- slightly better than some recent international forecasts, but below last year's pace of 3.9 percent.

The International Monetary Fund, in a statement following consultations with Manila, said it sees "a modest pickup in domestic demand" as a result of improved consumer confidence.

But it also said the Philippine economy is subject to risks of a global slowdown, which could hurt the country's electronics exports, and higher interest rates from the country's budget deficit.

The IMF figures are slightly different from those of the government, which said it posted four percent gross domestic product growth last year, and is projecting expansion of 3.3 percent to 3.8 percent for 2001.

But multilateral lending agencies were recently forecasting the economy will grow 2.6 percent this year, or barely above the national birth rate of 2.36 percent.

The IMF said President Gloria Arroyo "inherited a challenging economic situation, with heightened vulnerabilities in the fiscal, banking and external sectors."

The IMF said inflation should moderate from about 6.7 percent in April to five percent by the end of the year, which should allow the central bank to cut interest rates.