A worker installs steel rods at a construction site in Paranaque city, metro Manila, the Philippines. (Photo: REUTERS/Romeo Ranoco)

Hanoi (VNA) - The World Bank (WB) said on December 21 that it has revised down its growth projections for the Philippines to 6.4 percent in 2018 and 6.5 percent in 2019 as persistently high inflation affects consumer spending.

These new forecast numbers are slight revisions of the bank’s growth forecasts of 6.5 percent for 2018 and 6.7 percent for 2019, released through the Philippines Economic Update in October.

“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, a WB senior economist, said in a statement.

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

The country’s annual inflation, coming off its highest in nearly a decade, slowed to a four-month low in November amid slower growth in process of food and utilities. It allowed the central bank last week to keep its benchmark interest rates unchanged, pausing after five straight hikes.

The WB also said the mid-term election next May is also expected to strengthen consumption by temporary raising employment and disposable incomes in early 2019.

However, the Philippines could face headwinds from possibly weaker investment given a delay in approving the budget for 2019, while weak global trade could dampen exports.

Nonetheless, the WB said the Philippines remains one of the fast-growing economies in East Asia and the Pacific region. 

The Philippine Government targets GDP growth of 6.5-6.9 percent this year, down from the previous 7-8 percent growth goal. The annual growth target for 2019-2022 has been kept at 7-8 percent.-VNA