World Bank sees PH economy growing 6.4%

Credit to Author: ANNA LEAH E. GONZALES| Date: Wed, 05 Jun 2019 16:21:21 +0000

THE Philippine economy is still projected to grow by more than 6 percent this year on the back of strong local demand, according to the World Bank.

In its “Global Economic Prospects Heightened Tensions, Subdued Investment” report released on Tuesday, the multilateral lender retained its 6.4-percent economic growth forecast for the country for 2019, an acceleration from the 6.2 percent expansion in 2018.

This aerial photo, shows new skyscrapers being constructed over Manila’s financial district. File Photo

It also retained its 6.5-percent growth projection for 2020 and 2021.

“In the Philippines, private consumption is rebounding amid slowing inflation and improving employment conditions,” the World Bank said.

“In addition, election-related spending in the first half of 2019 is giving the economy an additional boost and is partly mitigating the impact of weakening exports,” it added.

The World Bank said the Philippines was also expected to benefit from large public infrastructure projects that are coming onstream in 2020 and 2021.

The growth forecast for the country is higher than that for China (6.2 percent), Fiji (3.4 percent), Indonesia (5.2 percent), Malaysia (4.6 percent), Papua New Guinea (5.6 percent), Solomon
Islands (2.9 percent) and Thailand (3.5 percent).

Countries in East Asia and the Pacific that are projected to grow faster than the Philippines include Cambodia (7.0 percent), Lao People’s Democratic Republic (6.6 percent), Mongolia (7.2 percent), and Myanmar (6.5 percent).

“Inflation is subdued or declining in most countries (Cambodia, the Philippines, Thailand, Vietnam), allowing monetary authorities to keep policy rates steady, generally at accommodative levels,” the World Bank said, adding that domestic demand in these four would continue to benefit from favorable financing conditions amid low inflation and rising capital flows.

It, however, noted that risks to growth for the Philippines and other countries in East Asia and the Pacific “remain tilted to the downside.”

“They include the possibility of a sharper-than-expected downturn in large economies, a further slowing of global trade, a possible intensification of trade tensions, and an abrupt change in global financing conditions and investor sentiment,” it said.

The report noted that policy uncertainty in the region also remained high due to the ongoing trade war between China and the United States that saw them imposing tariffs worth billions of dollars on each other’s goods. Talks aimed at resolving the conflict have yielded nothing.

“Failure to reach a long-term agreement between these two economies could lead to a further escalation in tariffs, with broad-ranging global and regional consequences,” the World Bank said.

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