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2025 Outlook: Expect continued monetary easing
As central banks across the globe shift to easing mode, the Philippines stands poised for a 6.2% growth amid uncertainties in the US, China’s challenges, and European recovery.
By Metrobank Research
(Editor’s note: The downloadable PDF of the report has been updated to reflect corrections in the dot plot on page 3 and the USD/PHP rates and inflation on page 10.)
We have seen rate cuts across the globe in 2024. Now where do we see economies headed? We will take you through our calls for the coming year, looking at GDP growth, the inflation outlook, the interest rate environment, and the fate of the peso against the US dollar.
Key points
- US growth remains resilient and inflation is progressing towards target, but a second Trump administration may pose risks.
- Tepid economic growth and slow inflation persists in China amid domestic demand challenges.
- In the Eurozone, inflation is easing while economic recovery is expected, although slower than anticipated.
- The United Kingdom is dealing with elevated inflation and a sluggish economy.
- The Philippines will likely hit the 6-8% growth target of the Development Budget Coordination Committee (DBCC), while inflation will continue to tread a “target-consistent path” until 2026.
What now?
Metrobank Research anticipates continued monetary easing by the Bangko Sentral ng Pilipinas (BSP) and major central banks despite potential inflationary pressures in the US from a Trump 2.0 presidency, with geopolitical tensions posing additional risks.
Locally, robust economic growth of 6.2% and target-consistent inflation of 3.2% are expected in 2025, supported by a cumulative 75 basis points (bps) of easing by the BSP, which will bring the policy rate to 5.0% by year-end.
A stronger dollar is also expected, with the USD/PHP closing rate forecasted at 57.9 by the end of 2025.
Download our report below.
(Disclaimer: This is general investment information only and does not constitute an offer or guarantee, with all investment decisions made at your own risk. The bank takes no responsibility for any potential losses.)
Monetary easing is expected to continue
Risks to growth across the globe persist amid US uncertainties, China’s challenges, and European recovery.
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