Economic Forum with Mr. Enrico Cruz: Economic Outlook 2016

21.01.16 AHK News

Mr. Enrico Cruz of Deutsche Bank welcomed everyone in the New Year and gave his traditional forecast for the year ahead at the German Club Manila.

The Deutsche Bank AG Manila Chief Country Officer and Head of Corporate Banking and Securities first presented an economic review of the past year and proceeded with an outlook for 2016.

Cruz started out by giving a short recap of the global economic developments in 2015. Hereby he focused on the US, the European and the emerging markets. He explained that the economic growth of the Eurozone in the past year was quite a surprise, whereas the US and emerging markets disappointed with a decline in growth rates. The inflation in developed markets also remained very low, often close to zero.

The growth rate in the Philippines however, did much better. Even though it fell behind the expectations of 6.5 percent it reached a rate close to 6 percent. ‘The inflation was with 1.4 percent the lowest we have seen in the Philippines’, Mr. Cruz explains. With the right level of growth and inflation, the economy in the Philippines reached an all-time high.

Mr. Cruz went on with his forecast for 2016. For certain countries in Latin America, Europe and Russia the expected GDP growth rates are rather flat or even negative. The US will see a moderate growth between one and three percent. China’s growth is gradually slowing down but will stay above five percent. The global inflation remains near the 40-year low, but is expected to rise gradually in 2016 as some of the forces keeping it low are fading.

Deutsche Bank’s outlook for the Philippines appears to be more positive. Though a severe drop in agricultural output due to a strengthening of the climatic phenomenon El Nino is a downside risk to growth, remittance inflows and rapid growth in the BPO industry help sustain a robust domestic activity at least in the next two years.

The Economic Forum with Mr. Cruz showed how the Philippine Economy is still thriving while other economies in Asia and also in Europe are fighting for better growth rates or a proper inflation rate. According to Deutsche Bank this state will not change within 2016. The upcoming elections might bring political and social changes, but the economy is continuing to gain in strength and stability.