World Bank: Philippines to remain one of East Asia’s fastest growing economies.
16 July 2018
The World Bank reported that the Philippines are expected to maintain their strong economic growth until 2020, upholding their position as one of the top growing countries in East Asia and the Pacific.
Looking at East Asia and the Pacific as a whole, the World Bank (in their June Global Economic Prospect report) predicted that East Asia’s economic growth would “gradually moderate” from 6.8% this year to a 6.1 % average over the next two years. This will be due to “the gradual structural slowdown in China, the region’s largest economy. Activity in the rest of the region is expected to peak in 2018 and remain steady around its potential rate in 2019 and 2020.”
This projection was “predicated on broadly stable commodity prices in the next two years, solid but moderating global demand, and a gradual tightening of global financing conditions.”
The report projected that the Philippines’ economy will grow 6.7% in 2018 and 2019, while dropping to 6.6% in 2020. These projections were, however, lower than the government targets of 7% – 8% between 2018 and 2022.
When looking at other East Asian countries, Vietnam and Cambodia are projected to have higher GDP growth than the Philippines, with the two countries predicted to have a 6.8% and 6.9% growth respectively in 2018. India, whose economy is often compared to the Philippines, is also expected to have a higher GDP growth with a projected 7.3% this year increasing to 7.5 in 2019 and 2020.
The report also noted “growth in the Philippines and Vietnam remains robust, but capacity constraints (e.g., high capacity utilization rates) limit further acceleration, especially in the Philippines.”
“Overall, the region benefits from solid fundamentals, including moderate domestic and external imbalances and significant policy buffers.” However some countries in the region will continue to face vulnerabilities, the report continued. While the Philippines, China, and Vietnam continue to experience fast credit growth, other countries in the region are not faring as well. Countries like Thailand, Laos, and Malaysia dealt with elevated levels of debt. At the same time Cambodia and Vietnam had to deal with their large fiscal deficits.
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