The Philippines is projected to be one of the fastest growing economies in 2021 and 2022 in the East Asia and Pacific region, according to a report released by the World Bank yesterday.
According to the World Bank’s latest Global Economic Prospects, the Philippines is estimated to have grown by 5.3 percent last year, while projections for 2022 and 2023 are 5.9 percent and 5.7 percent, respectively.
These forecasted figures are the same with those released in the Philippine Economic Update last month.
“Growth in the Philippines is projected at 5.9 percent in 2022, supported by sustained public investment and recovering household consumption, and moderate to 5.7 percent in 2023,” the World Bank said.
According to the multilateral agency’s report, the Philippines is estimated to have the second fastest growth in 2021 among the identified East Asia and Pacific economies, next only to China’s 8 percent.
To recall, the country came from a sharp contraction of 9.6 percent in 2020 amid the economic impact of the coronavirus disease 2019 (COVID-19) pandemic.
For this year, the projection for the Philippines is the third fastest among the East Asia and Pacific countries in the report, with Palau and Fiji recording faster growths of 12 percent and 7.8 percent, respectively.
“In many countries, especially in the economies that rely heavily on tourism, the recovery of output to its pre-pandemic level is not expected until 2022 (Cambodia, Malaysia, the Philippines) or 2023 (Thailand, some small Pacific island economies),” the World Bank said.
As per the Philippine government’s Development Budget Coordination Committee meeting held last December, the growth assumption for 2021 is 5 to 5.5 percent while growth targets for the medium-term were retained at 7 to 9 percent for 2022 and at 6 to 7 percent by 2023 and 2024.
Meanwhile, the World Bank said following a strong rebound in 2021, the global economy is entering a pronounced slowdown amid fresh threats from COVID-19 variants and a rise in inflation, debt and income inequality that could endanger the recovery in emerging and developing economies.
“The rapid spread of the Omicron variant indicates that the pandemic will likely continue to disrupt economic activity in the near term. In addition, a notable deceleration in major economies — including the United States and China — will weigh on external demand in emerging and developing economies,” the World Bank said.
“At a time when governments in many developing economies lack the policy space to support activity if needed, new COVID-19 outbreaks, persistent supply-chain bottlenecks and inflationary pressures, and elevated financial vulnerabilities in large swaths of the world could increase the risk of a hard landing,” it added.
According to the Washington-based agency’s report, global growth is expected to decelerate markedly from 5.5 percent in 2021 to 4.1 percent in 2022 and 3.2 percent in 2023 as pent-up demand dissipates and as fiscal and monetary support is unwound across the world.
“The world economy is simultaneously facing COVID-19, inflation, and policy uncertainty, with government spending and monetary policies in uncharted territory. Rising inequality and security challenges are particularly harmful for developing countries,” said David Malpass, World Bank Group president.
“Putting more countries on a favorable growth path requires concerted international action and a comprehensive set of national policy responses,” he added.
