The International Monetary Fund (IMF) expects the economy to grow by 6 percent this year, getting a boost from policy reforms and moderating inflation.

“Growth is expected to rebound on the back of stronger consumption demand, higher public and private investment, and a recovery in exports,” IMF deputy division chief Elif Arbatli Saxegaard said on Monday in a briefing at the Bangko Sentral ng Pilipinas (BSP) in Pasay City.

The 6 percent full-year forecast is higher than the 5.7 percent recorded for the first quarter by the Philippine Statistics Authority.

However, it is slightly lower than the 6.2 percent IMF estimated in its briefing in April.

Saxegaard said she expects the net inflow of foreign investments to continue after the streamlining of policies under the Public-Private Partnership (PPP) Code.

“Implementation will be key, with careful selection of projects to reduce infrastructure gaps. Climate change adaptation targets should benefit from recent measures to facilitate foreign ownership in the renewable energy sector,” she said.

55 flagship projects completed

Data from the PPP Center showed 55 PPP projects have been completed, 205 are still being built, and 138 are in the pipeline.

Saxegaard added full-year inflation will likely decline to 3.6 percent this year from IMF’s previous 3.6 percent estimate.

She said the better inflation forecast was influenced by the projected lower rice prices from the lower tariff on rice imports and streamlining of administrative procedures on agriculture.

“We anticipated earlier that household consumption would grow slightly higher in the first quarter. Our conjecture is that it has to do with the uptick in inflation in the first quarter,” she said.

Saxegaard said the BSP might lower its policy rate once the inflation hit 3 percent to drive economic growth.

“Although we expect inflation to go down in the second half of this year, one needs to be vigilant and see how the inflation outturn presents itself. We’re in a very uncertain world and we have to be very modest in our predictions,” she said.

She said inflationary risks include geopolitical tensions and recurrent commodity price volatility.

Saxegaard sees the country’s income from exports to grow, leading to a narrower current account deficit of 2.1 percent of gross domestic product this year from 2.6 percent last year.