Narrower current account deficit seen this year

The Philippines may incur a smaller current account deficit this year on the back of a brighter outlook for the global economy, according to BMI Country Risk & Industry Research.

- KEISHA TA-ASAN

In an analysis, the unit of Fitch Solutions said it lowered its 2024 current account deficit forecast for the Philippines to 2.3 percent of gross domestic product (GDP) from the previous target of 2.8 percent.

The revised forecast is above the one percent projection given by the Bangko Sentral ng Pilipinas (BSP) earlier this month. It is also narrower than the 2.6 percent recorded in 2023.

"A more optimistic global outlook was the main reason behind this revision," BMI said. "We initially anticipated a more significant downturn in worldwide demand."

The research firm said the global economy has proven to be more resilient than initially expected, prompting them to raise their global GDP growth forecast to 2.4 percent this year from 2.1 percent previously.

However, BMI said external demand may weaken in the second half as major trading partners face domestic economic headwinds of their own.