World Bank keeps PHL growth forecast, lowers global projection

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MANILA -- Washington-based World Bank maintained its Philippine economic forecast, while it lowered  the projection for East Asia and the Pacific and the rest of the world. 



The Philippine economy can still to grow at an annual rate of 6.2 percent and 6.4 percent this year and the next, respectively, the World Bank said in its latest Global Economic Prospects report released Thursday in Manila. 


Global growth is seen at 2.2 percent this year—led by a 5.1 percent surge in developing countries—down from 2.4 percent in a January estimate. The World Bank expects the global economy to grow by 3.0 percent next year.  


Forecast for East Asia and the Pacific this year was also cut to 7.3 percent from 7.9 percent. Regional growth, however, is seen accelerating to 7.5 percent in 2014. 


“The main risks to the region are internal, associated with a sharp reduction in Chinese investment, quantitative easing in Japan and rapidly rising debt and asset prices pose risks for Indonesia, Malaysia, Thailand and the Philippines,” the report read. 


The multilateral lender, however, said East Asia and the Pacific economies like Thailand and the Philippines may benefit from Japan's stimulus. 


“Suppliers of parts and components to Japan in regional production networks, particularly Thailand and the Philippines, could benefit from gains by Japanese exporters in global markets and even derive additional benefits through increased potential FDI from Japan,” the report read. 


Despite cuts in economic forecasts, the World Bank said risks seem to be diminishing and growth was more stable than in the buildup to the US-centered 2008 financial crisis that pitched the global economy into recession.


“We're moving towards a less volatile period where growth is going to be slower but less subject to strong fluctuations, especially those coming from the high-income world that we've observed in the previous years,” Andrew Burns, co-author of the report, was quoted by Agence France-Presse as saying. 


The 2013 projection falls within government's 6 to 7 percent target and is slightly higher than 6 percent forecast by the Asian Development Bank.