MANILA – The World Bank has retained its Philippine economic growth forecast for 2019, while expecting global growth at a slower pace than earlier expected.
In its “Global Economic Prospects” report sent to reporters on Wednesday, the World Bank said it still sees the Philippine economy growing at 6.4 percent this year.
“Domestic demand will continue to benefit from favorable financing conditions amid low inflation and rising capital flows in Cambodia, the Philippines, Thailand, and Vietnam,” the World Bank said in an accompanying statement.
The Philippine Statistics Authority (PSA) earlier on Wednesday reported May inflation settled at 3.2 percent, the first uptick in seven months since inflation started to decelerate in October 2018.
Philippines will profit from large public infrastructure projects coming onstream in 2020-21,” said the World Bank.
In April, the World Bank announced its growth forecast for the Philippines 6.4 percent with the downside risks to growth elevated.
The multilateral lender earlier said it expects economic growth at 6.5 percent this year, given downside risks such as the reenacted budget and the El Niño phenomenon.
While retaining its economic outlook for the Philippines, the bank now sees both regional and global economic growth at a slower pace given the trade concerns regarding China and the United States.
“Growth in East Asia and Pacific is slowing, largely due to a deceleration in China, and is projected to ease to 5.9 percent in 2019. This is the first time since the 1997-1998 Asian financial crisis that growth in the region has dropped below 6 percent.”
The same report noted the global economy expanding by 2.6 percent this year, slower than the 2.9 percent earlier announced.
“Current economic momentum remains weak, while heightened debt levels and subdued investment growth in developing economies are holding countries back from achieving their potential,” said World Bank Group president David Malpass.
“It’s urgent that countries make significant structural reforms that improve the business climate and attract investment. They also need to make debt management and transparency a high priority so that new debt adds to growth and investment,” he explained.
For its part, the government’s Development Budget Coordination Committee (DBCC) downgraded last march its economic growth targets for 2019 to 6.0 to 7.0 percent, lower than the earlier announced target range of 7.0 to 8.0 percent. (GMA News)