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WB downgrades 2017 Philippines growth forecast to 6.8%
MANILA, Philippines – The World Bank downgraded its economic growth forecast for the Philippines this year to 6.8 percent, but retained its growth projection of 6.9 percent for 2018.
The revised 2017 projection considers recent economic trends and compares with the 6.9 percent growth forecast in April, the multilateral lending institution said.
“Reflecting slower public spending in the first quarter, government consumption and investment growth somewhat weakened on an annual basis. However, export and growth of private consumption remained strong,” the World Bank Philippines said.
World Bank lead economist for the Philippines Birgit Hansl said greater investment in infrastructure is critical to the country’s growth prospects in the medium term.
“In the medium term, supporting higher investment levels will be critical to sustain the economy’s growth momentum,” Hansl said.
“The government’s ability to realize its infrastructure spending agenda will determine if the Philippines can achieve the growth target of 6.5 to 7.5 percent for 2017,” she said.
The World Bank expects consumption to grow at a slower but stable rate of 5.6 percent in 2017 and 6.1 percent in 2018 compared with 7.2 percent in 2016 which was an election year.
“The prospect of maintaining consumption growth at current levels over the medium term is supported by robust remittance flows. Remittances increased by eight percent in the first quarter of 2017, compared to three percent in the first quarter of 2016,” said the multilateral lending institution.
Sustained economic growth in the country is expected to create more jobs and raise incomes across all income groups, the bank said, noting that between 2012 and 2015, household income among the bottom 40 percent of income distribution in the country rose by an average of 7.6 percent annually.
Demand for Philippine exports is also expected to pick up as global economic trade and activity improve gradually.
“Robust growth among the country’s main trading partners is expected to boost demand for Philippine exports,” the bank said.
The country’s economy expanded 6.4 percent in the first quarter – lower than the market forecast of between 6.8 to seven percent – largely due to the absence of election-related spending and slower government spending.
Source: http://www.philstar.com/business/2017/07/03/1715693/wb-downgrades-2017-philippines-growth-forecast-6.8