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MANILA – Standard Chartered Bank forecast Philippine economic growth to slow to between 1.8 and 2.7 percent this year should Greece exit from the European monetary union.
The low-end of the bank’s forecast assumes a disorderly exit from the monetary union, while the high-end, containment of any contagion.
For 2013, the lender forecast 3.1 percent growth under a disorderly exit scenario and 4.4 percent under a containment scenario.
The Philippine government is aiming for a five to six percent growth this year. Philippine gross domestic product expanded by 6.4 percent in the first quarter.
SCB’s latest forecast for Philippine GDP growth is lower than the 3.2 percent estimate made earlier for 2012 and 5.3 percent for the following year.
“We assess the effects of a Greek exit from the European Monetary Union on our footprint markets of Asia, Africa and the Middle East. If contagion is contained by European Central Bank liquidity injections, which is our core scenario, any negative impact on emerging-market growth is likely to be limited and temporary,” the bank said.
“We also expect emerging market central banks and governments to take the necessary action to stimulate their economies. If the European authorities fail to contain the fallout from Greece’s exit, leading to exits by other EMU members, the economic and financial impact on emerging markets could be comparable to the 2008-09 global financial crisis,” SCB said.
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