The World Bank (WB) on Tuesday said the Philippine economy will likely grow by 5.7 percent in 2023, below the government’s projected range of 6 to 7 percent, dragged down by global headwinds affecting most countries today.
In a press conference, World Bank Country Director for the Philippines Dr. Ndiamé Diop said that global growth is expected to decelerate sharply in 2023 due to heightened geopolitical tensions, continued supply chain bottlenecks and tightening global financial conditions.
“The baseline forecast for 2023 is a sharp slowdown in global growth. But there is a real risk that moderate shocks can tilt the global economy into recession, which will have dire consequences to the growth recovery in many emerging markets and developing economies, including the Philippines,” Diop added.
The World Bank’s latest projection came a day after the government lowered its projection for 2023, after a hard-pressed year marked with a 14-year high inflation and a substantial weakening of the local currency.
On a positive note, Diop said they see strong domestic demand in the Philippines, which was bringing renewed opportunities for income generation and improvements in the labor market.
“The impressive 7.6 percent growth in the third quarter was indeed among the best performances in the region,” said Diop, referring to the growth of the country’s gross domestic product, the measure of the size and health of a country’s economy.
However, the World Bank official said that the domestic inflation rate was threatening household consumption while rising interest rates could temper investments. INQ