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World Bank upgrades 2022, cuts 2023 Philippine growth projections


The World Bank on Tuesday upgraded its Philippine economic growth forecast for this year, but downgraded its projections for 2023 in line with the anticipated global economic slowdown.

According to World Bank senior economist Ralph van Doorn, economic growth for 2022 was hiked to 7.2% from the 6.5% projection in September, following the higher-than-expected performance in the third quarter.

The economy grew by 7.6% in the third quarter of 2022, up from the upwardly adjusted 7.5% growth recorded in the second quarter and the 7.0% in the third quarter of 2021.

“Now we do expect that the favorable external environment will slow growth momentum in the fourth quarter of (2022) and into (2023),” van Doorn told reporters in a briefing.

For 2023, the World Bank said it now expects growth at 5.7%, lower than the 5.8% projection it made in September, citing the expected deceleration in global growth.

“In 2023 we've seen a downward revision of growth given the deteriorating global environment,” van Doorn said.

“What we noticed is that the worsening conditions since the summer have really affected the global economy, have really affected our outlook of the economy, and the Philippines cannot escape gravity,” he added.

The forecast for 2023 is also premised on lower consumer demand accompanied by high inflation, and higher interest rates which are seen to hit household spending and investments.

“On the domestic side there’s a risk of prolonged domestic inflation, which may dampen domestic household consumption and there’s still always a risk of another COVID-19 wave,” van Doorn said.

The Philippine Statistics Authority (PSA) earlier on Tuesday announced November inflation at a 14-year high of 8.0%, driven mainly by higher prices of food and non-alcoholic beverages.

The Bangko Sentral ng Pilipinas (BSP) has continued to hike rates to address this, with the latest being a 75-basis-point hike in November after a policy tightening of 225 basis points earlier in the year.

Moving forward, World Bank Country Director for the Philippines Ndiamé Diop called for the country’s sustained investments in agriculture, health and education to address vulnerabilities from the scarring impact of the COVID-19 pandemic.

“Shocks from the COVID-19 pandemic have worsened child malnutrition and stunting and hampered student learning especially among the poor and most vulnerable families,” he said.

“If unmitigated, these shocks can have persistent impacts on people’s wellbeing and damage their future productivity, earnings, and capacities for innovation,” he added.

Economic managers on Monday also downgraded the growth outlook for 2023 to between 6.0% to 7.0% from the earlier projected 6.5% to 8.0%, citing external headwinds.—AOL, GMA Integrated News

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