The World Bank has kept its growth forecasts for the Philippines until 2026, and this is expected to outpace that of growth of most Asean neighbors this year.
The Washington-based agency’s Global Economic Prospects report showed the Philippines is expected to grow by 5.8 percent for 2024 and 5.9 percent in the next two years.
These estimates fall below the government’s growth assumptions of six to seven percent for 2024, 6.5 to 7.5 percent for next year and 6.5 to eight percent from 2026 until end of the administration’s term.
However, based on the latest report, the Philippines will be one of the fastest-growing economies in the Asean region this year.
To compare, for 2024, Cambodia is seen to grow as fast as the Philippines at 5.8 percent.
Forecasts for neighboring economies for this year are 5.5 percent for Vietnam; five percent for Indonesia; 4.3 percent for Malaysia; four percent for Lao PDR; 2.4 percent for Thailand and for Myanmar, one percent.
For next year, Cambodia and Vietnam are seen to grow at a slightly faster pace than the Philippines at 6.1 percent and six percent, respectively.
Meanwhile, estimates for other Asean economies are 5.1 percent for Indonesia; 4.4 percent for Malaysia; 4.1 percent for Lao PDR and 2.8 percent for Thailand. No estimate was given for Myanmar for the next two years.
In 2026, Vietnam and Cambodia will continue to surpass the growth of the Philippines based on the World Bank’s computations, with projected expansions of 6.5 percent and 6.4 percent, respectively.
Indonesia is seen to post growth of 5.1 percent; Malaysia, 4.3 percent; Lao PDR, 4.1 percent and Thailand, 2.9 percent.
“Over the forecast horizon, GDP (gross domestic product) growth in most East Asia and Pacific economies except China–including Indonesia, Malaysia and the Philippines–will be anchored by solid growth of private consumption supported by low inflation, declining borrowing costs, and firm labor market conditions,” the report said.
“However, both private and public investment are projected to remain subdued. Heightened uncertainty, related in some cases to recent political transitions and conflict, and including about global trade policies, is expected to dampen private investment,” it added.
In its Philippine Economic Update report released just last week, The multilateral agency said growth is expected to be driven by strong household consumption, sustained strength in the services sector and improved trade stemming from a rebound in global demand for goods and the continued recovery of services exports such as tourism.
The projection is based on the expectation that inflation will ease, the World Bank said, thus strengthening household purchasing power.
However, risks to the growth outlook include higher than expected inflation, extreme weather and climate change, global geopolitical tensions, tighter than expected financial conditions and the possibility of a sharper slowdown in China.
A prolonged El Niño event, and possibly a La Niña, could strain the domestic food supply and trigger an increase in inflation, the Washington-based agency said.
