World Bank forecasts Philippines' GDP to grow 6% in 2023
Kuala Lumpur (VNA) – The World
Bank's Philippines Economic Update (PEU) said on June 7 that it expects the
Philippines' gross domestic product (GDP) to grow 6% this year and 5.9% in 2024 due to solid domestic demand.
According
to the PEU's report, strong domestic demand is underpinned by consumer spending,
drawing strength from the continuing jobs recovery and the steady flow of
remittances. Fixed capital investment will also contribute to growth, domestic
activity and business confidence.
The
report said the services sector will continue to support growth, buoyed by
spillovers from China's reopening. The recovery of international tourism will
contribute to boosting the growth of transportation, accommodation, food, and
wholesale and retail trade services.
It added
that the country's information technology-business process outsourcing (IT-BPO)
industries will continue to bolster the services sector as foreign companies
outsource their business operations to the Philippines to reduce costs.
Implementing
recently passed reforms that allow greater foreign participation in the economy
will encourage private investment and strengthen growth in the country over the
medium term.
Global
risks to the Philippines' economic outlook include the possibility of rising
inflation, higher interest rates, and an escalation of geopolitical tensions
brought about by the Ukraine crisis, which could cause a sharper-than-expected
global slowdown that hampers Philippine exports.
Within
the country, high inflation remains a risk to the economic outlook due to
several factors, including natural disasters affecting food supply, the threat
of El Nino that could further constrain food production, logistics and supply
chain challenges, and pressure from domestic demand.
Despite
the higher GDP forecast, the WB stressed the need to improve
the efficiency of social protection for the poor and most vulnerable as the
Southeast Asian country is grappling with global uncertainties and domestic risks,
including high inflation./.