World Bank trims PH growth forecasts
Credit to Author: MAYVELIN U. CARABALLO, TMT| Date: Fri, 21 Dec 2018 17:37:51 +0000
The World Bank has cut its Philippine growth forecasts for this year and the next, noting factors such as the possibility of a reenacted budget for part of 2019 and mid-term election spending.
“As part of its forecasting exercise, the World Bank has updated its growth projections for the Philippines to 6.4 percent in 2018 and 6.5 percent in 2019,” the World Bank’s Manila office said in a statement on Friday.
Both are lower than the 6.5 percent and 6.7 percent estimates released in October, and also fall below the government’s downwardly revised 6.5-6.9 percent target for 2019 and the 7.0-8.0 goal for the following year.
The latest figure for 2018 represents another downward revision for the year as the World Bank, in April, issued a 6.7-percent forecast.
Gross domestic product (GDP) growth is currently running below target based on latest data, averaging 6.3 percent as of end-September following first to third quarter outturns of 6.6 percent, 6.2 percent and 6.1 percent, respectively.
The Washington-based lender, however, said the Philippines was still expected to post one of the fastest growth rates in the East Asia and the Pacific region.
“A strong, consistent delivery of the infrastructure investment agenda while sustaining improvements in health, education and social protection will be key to maintaining the robust and inclusive growth outlook of the Philippines,” the statement quoted senior economist Rong Qian as saying.
While persistently high inflation could temper private consumption growth in the fourth quarter of 2018, a easing in the following quarters is expected to boost consumer confidence and raise private consumption in 2019.
Consumer price growth has accelerated since the start of the year, breaching the 2.0-4.0 percent target in March and then peaking at 6.7 percent in September-October. It slowed to 6.0 percent in November and is expected to return to the target band next year.
The mid-term elections in May, meanwhile, is also expected to strengthen consumption by temporarily raising employment and disposable incomes.
The World Bank, warned, however, that “growth maybe be tempered in the first half of 2019 due to the possible reenactment of the first-quarter 2019 budget following a delay in the budget approval process.”
Economic managers earlier this month said that economic growth could slow substantially next year under a reenacted budget.
With global trade expected to remain weak, meanwhile, the World Bank said that Philippine exports were likely to remain under pressure.
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