World Bank Predicts Lower PH Growth for 2023

The World Bank recently changed its growth forecast for the Philippines and predicts that the economy will expand at a slower pace in 2023 in light of inflation and a global slowdown.

In the Philippines Economic Update report, the World Bank increased the gross domestic product (GDP) growth outlook for the Philippines to 7.2% for 2022, which is an increase from the 6.5% outlook predicted last September. This figure hits the government’s 6.5 – 7.5% target for 2022.

Ndiame Diop, World Bank Country Director for the Philippines, has stated that domestic demand drives economic growth, which adds to income and job recovery.

“The Philippine economy has remained resilient despite a challenging global environment,”  mentioned Ralph van Doorn, World Bank Philippines Senior Economist.

On the other hand, the World Bank noted that the momentum of growth may slow down beginning in 2023, with a decreased GDP growth projection to 5.7% for 2023-2025 from a previous 5.8%.

The World Bank says that “The growth slowdown in 2023 is premised on the fading of pent-up demand, alongside elevated inflation and higher interest rate environment that will temper domestic demand,”

Diop says that this projection is hinged on a sharp slowdown in global growth and moderate shocks that can drive the global economy into a recession that “will have dire consequences in the recovery of emerging markets like the Philippines.”

The World Bank anticipates a slowdown in global growth for 2023, with weakening financial conditions, global monetary tightening, and further disruptions due to the Russia – Ukraine war.

“These external challenges have channeled through the Philippines in the form of high inflation, peso depreciation, and capital market volatility,”  says the World Bank.

Source: Business World