World Bank downgrades PHL growth outlook anew

The World Bank on Friday cut anew its economic growth forecast for the Philippines for this year and 2019, reflecting “recent economic trends.”

In a statement, the multilateral lender said it has updated its growth projections for the Philippines to 6.4 percent in 2018 and 6.5 percent in 2019 “as part of its forecasting exercise.”

The latest update came after growth slowed to 6.1 percent in the third quarter of the year from the 7 percent in the same period in 2017 and the revised 6.2 percent gross domestic product (GDP)  print in the second quarter of this year. 

This brings the year-to-date growth to 6.3 percent.

The new forecast figures are lower than the growth projections earlier released by the World Bank through the Philippines Economic Update in October.

The lender earlier pegged the Philippine economy will grow by 6.5 percent for 2018 and 6.7 percent.

This is the second growth forecast revision from the World Bank when it first estimated that the Philippines’ GDP will grow by 6.7 percent in 2018 in its Global Economic Prospects report in June.

Nonetheless, the World Bank said the Philippines remains one of the fast-growing economies 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,” Rong Qian, World Bank senior economist, said.

The lender said that while persistent high inflation may temper private consumption growth in the fourth quarter of 2018, a moderation in inflation in following quarters is expected to boost consumer confidence and raise private consumption in 2019.

“Also, the mid-term election in May is also expected to strengthen consumption by temporarily raising employment and disposable incomes in early 2019,” the World Bank said.

Investment growth, however, 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, it said.

“Moreover, global trade is expected to remain weak, thus dampening exports,” the World Bank said. —KBK, GMA News