By: Business Mirror
National Economic Development Authority (NEDA) Secretary Ernesto Pernia said that the GDP could dip to 0.3 percentage points to as low as 5.5 to 6.5% this year if the impact of coronavirus disease 2019 (Covid-19) lasts for six months, and 1 percentage point in GDP growth if the virus infects the economy for the whole year.
The government earlier predicted a growth of 6.5 to 7.5 percent this year.
Pernia said the estimates only account for the direct effect of Covid-19 on the economy through reduced tourism, travel and trade revenues. The assumptions include zero travel and tourism revenues from China, 10-percent reduction from tourists and travel from other countries.
He added that given the impact of Covid-19 on the economy, there is a chance that the country’s deficit may widen to as much as 3.3 to 3.5 percent of GDP. He added that this would lead to higher borrowings this year. The government aims to limit its deficit to GDP ratio to 3.2 percent between 2019 and 2022.
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