WB cuts growth outlook for PH

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The World Bank has downgraded its growth forecast for the Philippines amid elevated inflation and the weak global environment.

According to the East Asia and Pacific October 2023 Economic Update report released yesterday, the Washington-based agency estimates that the Philippine economy will grow by 5.6 percent this year and 5.8 percent in 2024.

“GDP (gross domestic product) growth in the Philippines is projected to moderate to 5.6 percent in 2023 from 7.6 percent in 2022 due to still-elevated inflation, tight financial conditions and a weak external environment,” Ergys Islamaj, World Bank senior economist for East Asia and Pacific, said during an online briefing.

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In the June edition of the Philippine economic update, the World Bank then estimated that the economy will grow by six percent for 2023 and 5.9 percent next year.

Nonetheless, the growth forecast for the Philippines this year is the highest among the Asean economies assessed in the report.

“The big concern has been slowing global growth. Philippines, like all the countries in the region, depends on the rest of the world for exports of goods and especially services and also a lot of Filipinos work abroad and send the remittances back,” said Aaditya Mattoo, World Bank East Asia and Pacific chief economist.

“All those factors are tied to the state of the global economy. So our projection reflects the fact that the global growth has slowed down, financial conditions have become tighter and are expected to ease in the future,” he added.

The World Bank’s projection falls below the Philippine government’s growth assumption for the year of six to seven percent.

“The good news in the Philippines is that we expect economic activity to be supported by domestic demand to be led by private consumption,” Mattoo added. – Angela Celis

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