ADB keeps growth forecast for Philippines at 6% in 2023
MANILA -The Philippine economy will remain on a healthy expansion mode albeit slower this year at 6 percent thanks to rising domestic demand and a recovery in services particularly tourism, according to the latest edition of the Asian Development Bank’s Asian Development Outlook (ADO) released Tuesday.
The ADB said a recovery in employment and retail trade, sustained expansion in the manufacturing sector, and rising public infrastructure spending will support growth in 2023, which will be slower than last year’s higher-than-forecast 7.6 percent.
In an earlier report from December 2022, the ADB forecast a 7.4-percent growth of the Philippines for 2022 and revised downward its forecast for 2023 to 6 percent from 6.3 percent.
Back then, the ADB noted risks from inflation stickiness, further increases in interest rates, and a sharper-than-expected slowdown of growth in advanced countries.
Similarly, on Tuesday, the multilateral lender warned that risks from a sharper-than-expected slowdown in major advanced economies, heightened geopolitical tensions and lingering high prices could dampen the outlook for Philippine economic growth.
The ADB maintained its growth forecast for this year at 6 percent, and penciled in 6.2 percent for 2024.
“The Philippines will grow at its potential this year and next and is on track toward its goal to become an upper middle-income country,” said Kelly Bird, ADB country director in the Philippines.
“Like most other economies, the Philippines will be increasingly challenged by the impacts of climate change and the effects of emerging technologies on the labor market,” Bird said in a statement on April 4.
Still, the ADB sees that a recovery in employment and retail trade, sustained expansion in the manufacturing sector and rising public infrastructure spending will support growth of Philippine gross domestic product (GDP).
“Key to sustaining a strong growth momentum is keeping public infrastructure spending at levels above 5 percent of GDP, as the government has planned for this year and in the medium term,” Bird said.
“High-impact infrastructure projects that will help connect communities to markets and public services and provide access to jobs and livelihood will help increase rural incomes and support inclusive growth,” he added.
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