The World Bank expects a slower growth for the Philippines this year as exports growth to major economies is seen to slow down.
In its Global Economic Prospects report released yesterday, the Washington-based agency said the Philippine economy is seen to grow by 5.4 percent in 2023.
“After the strong rebound in 2022, growth in Malaysia, the Philippines and Vietnam is expected to moderate as the growth of exports to major markets slows,” the report said.
“Growth is projected at four percent in Malaysia, 5.4 percent in the Philippines and 6.3 percent in Vietnam,” it added.
In its Philippine Economic Update last December, the World Bank saw the Philippines growing by 5.7 percent this year.
Meanwhile, it estimates a 7.2 percent expansion for 2022. For next year, growth is projected at 5.9 percent.
Just last month, the Philippine government’s Development Budget Coordination Committee (DBCC) has revised downwards its growth assumption for 2023 as it considered global headwinds such as the slowdown in major advanced economies.
The DBCC in December revised the 2023 gross domestic product growth projection to six to seven percent, from the 6.5 to eight percent assumption in its July meeting.
The World Bank said in its report that global growth is slowing sharply in the face of elevated inflation, higher interest rates, reduced investment and disruptions caused by Russia’s invasion of Ukraine.
According to the World Bank’s report, the global economy is projected to grow by 1.7 percent in 2023 and 2.7 percent in 2024. The sharp downturn in growth is expected to be widespread, with forecasts in 2023 revised down for 95 percent of advanced economies and nearly 70 percent of emerging market and developing economies.
The multilateral agency said given fragile economic conditions, any new adverse development — such as higher-than-expected inflation, abrupt rises in interest rates to contain it, a resurgence of the COVID-19 pandemic or escalating geopolitical tensions — could push the global economy into recession.
This would mark the first time in more than 80 years that two global recessions have occurred within the same decade.
“The crisis facing development is intensifying as the global growth outlook deteriorates.
Emerging and developing countries are facing a multi-year period of slow growth driven by heavy debt burdens and weak investment as global capital is absorbed by advanced economies faced with extremely high government debt levels and rising interest rates,” said World Bank Group President David Malpass.
“Weakness in growth and business investment will compound the already-devastating reversals in education, health, poverty and infrastructure and the increasing demands from climate change,” he added.
The World Bank said policymakers in small states can improve long-term growth prospects by bolstering resilience to climate change, fostering effective economic diversification and improving government efficiency.
The report calls upon the global community to assist small states by maintaining the flow of official assistance to support climate-change adaptation and help restore debt sustainability.
