The Philippine economy is projected to post slower growth this year as global demand weakens, but the expected growth will be among the fastest in the region, according to the World Bank.
‘After the strong rebound in 2022, growth in Malaysia, Philippines and Vietnam is expected to moderate as the growth of exports to major markets slows,’ the World Bank said in its latest Global Economic Prospects report.
The report showed the World Bank is projecting a 5.4 percent gross domestic product (GDP) growth for the Philippines for this year from its expected 7.2 percent growth for last year. These are the same forecasts the multilateral lender provided in its Philippines Economic Update report released last December.
The World Bank’s 2023 GDP forecast is lower than the government’s six to seven percent growth goal for this year.
While the Philippine economy is projected to slow down this year, the World Bank expects the country to have the second fastest growth in Southeast Asia next to Vietnam, which is projected to grow by 6.3 percent this year.
The World Bank expects the Philippines’ GDP to grow faster this year than Cambodia’s 5.2 percent, Indonesia’s 4.8 percent, Malaysia’s four percent, Laos’ 3.8 percent, Thailand’s 3.6 percent and Myanmar’s three percent.
For next year, the World Bank expects the Philippine economy to grow by 5.9 percent, placing the country next to Vietnam, which is projected to grow by 6.5 percent, and Cambodia’s 6.3 percent.
The Philippines is expected to post faster growth than Indonesia’s 4.9 percent, Laos’ 4.2 percent, Malaysia’s 3.9 percent and Thailand’s 3.7 percent next year.
The World Bank said there are multiple downside risks to its projections for the Philippines and other economies in the East Asia and Pacific region. These include renewed pandemic-related disruptions.
‘A prolonged war in Ukraine and intensifying geopolitical uncertainty could further reduce business and consumer confidence globally and lead to a sharper slowdown than projected in the region’s export growth,’ the World Bank said.
The multilateral lender said persistently high global inflation could also lead to more monetary tightening than expected.
This may cause a sharper-than-expected slowdown in global growth and capital outflows from emerging markets and developing economies.
‘Tighter global financial conditions could lead to debt distress, particularly in countries with high debt levels and large external financing needs,’ the World Bank said.
In addition, it said climate change-related weather events could lead to costly disasters in the region.
The World Bank expects the global economy to grow by 1.7 percent this year and 2.7 percent next year from the estimated 2.9 percent last year.
The global growth forecast for this year is the third weakest in nearly three decades, and reflects the aggressive monetary policy tightening aimed at containing high inflation, worsening financial conditions, and continued disruptions from Russia’s invasion of Ukraine