According to the World Bank, the Philippines is projected to have the highest economic growth rate in Southeast Asia this year. However, their forecast for the country’s gross domestic product (GDP) growth has been reduced due to ongoing inflation.flation and global headwinds.
On Monday, the World Bank released its Economic Update stating that it has revised its GDP growth forecast for the Philippines from 6% to 5.6%. This is consistent with the GDP outlook given in April.
Aaditya Mattoo is the Chief Economist for East Asia and the Pacific at the World Bank.fi
According to C, the decline in global economy is a significant worry for countries such as the Philippines.
According to Mr. Mattoo, the Philippines, along with other neighboring countries, relies on global exports of goods and services. Many Filipinos work overseas and send money back home, and all of these factors are connected to the state of the world economy.fing on Monday.
The Senior Economist for East Asia and the Pacific at the World Bank.fiflation
Ergys Islamaj stated that the economic growth of the Philippines in the current year will slow down compared to the 7.6% increase in GDP seen in 2022 due to high levels of inflation.flation, tighter fi
The financial situation is impacted by unfavorable conditions and a fragile outside climate.
“High inflation, tight fi
The World Bank stated that the Philippines’ growth was hindered by factors such as fiscal and monetary policies, delays in budget execution, and a sluggish global economy.
In the second quarter, the Philippine economy grew by 4.3%, marking its slowest growth in more than two years. In the first half of the year, the average economic growth was 5.3%, falling short of the government’s target of 6-7%.
The Philippines is expected to have a higher growth rate compared to Cambodia (5.5%), Indonesia (5%), Vietnam (4.7%), Malaysia (3.9%), Laos (3.7%), Thailand (3.4%), and Myanmar (3%).
The World Bank has revised its prediction for the Philippines’ growth rate in 2024 to 5.8%, down from the previous estimate of 5.9%. This falls short of the government’s target range of 6.5-8% for the following year.
If it comes to fruition, the Philippines would rank as the second most rapidly expanding economy in Southeast Asia by 2024, with only Cambodia’s 6.1% growth surpassing it.
The World Bank predicts that the GDP growth in the Philippines will average 5.7% from 2023 to 2025.
“The good news for the Philippines, I should say, is that we expect economic activity to be supported by domestic demand, led by private consumption and declining infl
“Mr. Mattoo stated, ‘It is important to take action.'”
According to him, the recent changes made to the Public Service Act (PSA) would aid in increasing investments.
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In April, the new act permits complete foreign ownership in a wider range of public services such as telecommunications, airlines, and railways.
The World Bank’s analysis on the Macro Poverty Outlook predicts that the Philippines will be in 202 in the year.fl
The forecast predicts a 5.9% average for this year, followed by a decrease to 3.6% in 2024.
Both predictions are slightly higher than the previous iteration.
The BSP has forecasted growth rates of 5.8% and 3.5% for the years 2023 and 2024.
The World Bank reported that inflation will slightly rise in 2023 as a result of potential risks to food inflation, but is expected to decrease and fall within the target range in 2024 due to improvements in food availability and reduced global commodity costs.
The World Bank predicts that inflation will decrease to 3% by 2025, which is lower than the BSP’s estimated rate of 3.4%.
The World Bank stated that in the short term, important steps for increasing growth include managing inflation and enhancing the effective use of budget.
The World Bank also encouraged economies to utilize opportunities in the services industry, which will play a crucial role in the region’s growth.
fic economies,” Mr. Mattoo said.
Mr. Mattoo stated that in the Philippines, there is a focus on providing quality service.fi
Foreign-owned rms are more inclined to utilize digital technologies, particularly if they have the opportunity to access them.fiber broadband.
“The services fi
According to him, organizations that implement these technologies have experienced a significant boost in productivity.
The World Bank has suggested implementing changes to support the liberalization and regulation of trade in services, addressing gaps in infrastructure and skills, and promoting international cooperation. – Luisa Maria Jacinta C. Jocson