WB Sees 5.8% PH Growth In Next 2 Years

The World Bank expects the Philippines to grow by 5.8 percent in 2024 and 2025 but still estimates a modest 5.6 percent gross domestic product (GDP) turnout this year, slower than previous forecasts, due to both external and domestic risks such as geopolitical tensions, trade issues, and climate-related disruptions.

The previous 2023 estimate of six percent growth was downgraded primarily due to external conditions. I Photo: World Bank Photo Collection Flickr

In a press briefing where World Bank economists presented the December 2023 Philippines Economic Update (PEU), the previous 2023 estimate of six percent growth was downgraded primarily due to external conditions.

However, continued measures to contain high inflation and effective investment reforms will ensure sustained growth, it said. Basically, the December PEU is unchanged from the October East Asia Pacific (EAP) report.

According to Ralph Van Doorn, World Bank Senior Economist, the "slight downgrade" in GDP forecasts compared to earlier in the year was due to the "disappointing growth both globally and locally and the slower Q2 (second quarter) growth (domestic)."

The local economy reported a lower-than-expected 4.3 percent GDP growth in the second quarter, which improved to 5.9 percent in the third quarter but still lower than the six to seven percent government projection.

As of the end of the third quarter, GDP average growth of 5.5 percent is lower compared to 7.7 percent in the first three quarters of 2022. For 2024 and 2025, the World Bank forecasts 5.8 percent growth for the Philippines.

Previously, it only announced a 5.8 percent growth for next year.

"(The 5.6% 2023 growth) is expected to be followed by a rebound of growth in 2024 to 2025. That will be driven by an improvement in domestic demand with services expected to drive growth due to ongoing recovery of the tourism sector and consistent performance of the IT-BPO industry," said Van Doorn.

He also expects that higher domestic demand in the next two years will "create jobs, increase household income, and benefit consumption in tourism and related industries."

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