MANILA, July 25 (Xinhua) -- The International Monetary Fund ( IMF) on Friday slashed its 2014 economic growth forecast for the Philippines to 6.2 percent due to a weak first quarter performance and expectations of sluggish expansion in the second quarter.
The latest forecast is lower than IMF's earlier projection of 6. 5 percent. IMF Resident Representative Shanaka Jayanath Peiris said growing the country's gross domestic product (GDP) by 6.2 percent this year would largely depend on the Philippine government's spending for infrastructure and services.
"We are expecting a recovery in (government) spending. We are basically assuming the government's fiscal plan goes according to plan," Peiris told reporters.
Data from the finance department showed that the Philippine government recorded a surplus of 8.5 billion pesos (196.31 million U.S. dollars) in the five months to May, a reversal of the 13.2 billion pesos (304.87 million U.S. dollars) deficit posted in the same period last year.
Philippine budget deficit this year is capped at 266.2 billion pesos (6.14 billion U.S. dollars) or 2 percent of the country's GDP. Last year, the budget deficit summed up to 164.1 billion pesos (3.79 billion U.S. dollars), below the ceiling of 238 billion pesos (5.49 billion U.S. dollars).
The latest projection of the IMF is lower than the 6.5 to 7.5 percent GDP growth target set by the Philippine government for 2014.