The World Bank has maintained its 6.7 percent growth forecast for the Philippine economy in 2019 despite rising global uncertainty.
In its latest Philippine economic update, the World Bank has revised Philippine government consumption growth upwards, while private consumption growth is expected to expand at 5.9 percent in 2018 and 6.2 percent in 2019.
Investment growth was slightly upgraded due to higher public capital outlays, including increased infrastructure spending. Overall, the World Bank expects real gross domestic product (GDP) growth to increase towards the end of 2018 and into the first half of 2019 with higher election-related public spending.
World Bank lead economist for the Philippines Birgit Hansl says the Philippine government’s ability to carry out its investment agenda would determine if the Philippines could achieve its growth target of 6.5 to 7.5 percent over the medium term.
“Higher private investment levels would be critical to sustain the Philippine economy’s growth momentum as capacity constraints become more binding,” says Hansl.
Exports, a key driver of growth for the Philippines economy, are projected to moderate in the coming years as global growth is expected to decelerate.
The World Bank’s June 2018 Global Economic Prospects projected a gradual global slowdown over the next two years with moderately higher commodity prices, strong but gradually moderating global demand, and incremental tightening of global financing conditions.
Uncertainty around global growth conditions has risen, with the possibility of trade and other policy shocks emerging from major economies.