The World Bank reaffirmed its strong outlook for the Philippine economy, keeping its forecast of 6.5 percent growth in gross domestic product (GDP) for this year unchanged despite the apparent slowdown in manufacturing and exports in April.
The Washington-based lender said in its Global Economic Prospects report the Philippine economy could grow faster this year than the 6.1 percent recorded in 2014.
“Growth in the Philippines is projected to remain strong, benefiting from a recovery in Japan and from low fuel prices,” it said in the report.
The World Bank’s estimate stands below the Philippine government’s target growth of 7 percent to 8 percent for the year.
The lender sees economic growth in Japan, one of the major trading partners of the Philippines, averaging 1.1 percent this year before gaining pace to 1.7 percent in 2016 as supported by the government’s expansionary policies.
Fiscal stimulus, combined with policy accommodation by the Bank of Japan, cost savings for corporations and households due to low energy prices, product and labor market reforms and the prospect of higher earnings following spring wage negotiations, should boost activity and confidence in Japan throughout 2015, it said in the report.
Regional growth seen easing
East Asia and Pacific (EAP) growth, meanwhile, is seen easing to 6.7 percent in 2015 and stabilizing thereafter.
In China, growth is projected to moderate to 7.1 percent in 2015 and 6.9 percent in 2017, reflecting policy efforts to achieve a more sustainable growth path.
But a continued slowdown in China should be gradually offset by a pickup in the rest of the EAP region, which are expected to benefit from a strengthening recovery in advanced countries, low energy prices, improved political stability, and ample liquidity in global financial markets despite an expected gradual tightening in the United States, it said.
“EAP countries will mostly benefit from low fuel prices, but the impact will vary across countries, reflecting the magnitude of net fuel imports, energy intensity of production, and the share of oil and gas in energy consumption,” it added.
In the region excluding China, the World Bank’s forecast is for growth to reach 4.9 percent in 2015, driven by the large Association of Southeast Asian Nations (Asean) economies, including the Philippines.