The World Bank has revised its 2023 growth forecast for the Philippines downward to 5.6% from the previous estimate of 6%, citing factors such as elevated inflation, tight financial conditions, and a slow global economy. Ergys Islamaj, the World Bank's senior economist for East Asia and Pacific, made this announcement during the institution's East Asia and Pacific Economic Update online briefing on Monday.
According to Islamaj, the GDP growth in the Philippines is expected to decelerate from 7.6% in 2022. However, he projected a slight increase in growth to 5.8% in 2024, albeit slower than the earlier estimate of 5.9%.
Aaditya Mattoo, the World Bank's chief economist for East Asia and Pacific, echoed Islamaj's sentiments by expressing concerns about the slowing global growth impacting regional economies. Despite this, Mattoo highlighted a positive aspect for the Philippines: domestic demand, led by private consumption and decelerating inflation, is projected to support economic activity.
In parallel with its outlook on the Philippines, the World Bank also cut its growth projection for China's economy due to ongoing domestic headwinds. The bank pointed out that factors like the fading rebound from post-lockdown economic reopening, high debt levels, and a weak property sector would impact China's growth.
Consequently, the World Bank revised down its 2024 forecast for China's GDP growth to 4.4% from 4.8%. However, it maintained its 2023 GDP growth forecast for China at 5.1%.
The bank also noted that economic growth in the East Asia and Pacific region is decelerating quicker than anticipated. Key external factors affecting this region include slowing global growth and persistently tight financial conditions. On the domestic front, increased public and private debt and the macroeconomic policy stance were identified as significant factors.
As per the World Bank's revised forecasts, the East Asia and Pacific region's GDP growth is projected at 5.0% in 2023 and 4.5% in 2024, compared to previous forecasts of 5.1% and 4.8%, respectively.
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