The Asian Development Bank kept its economic growth forecast for the Philippines this year and next on the back of robust investment and private consumption.
The Manila-based multilateral lender said in its Asian Development Outlook July Update the Philippine economy, as measured by the gross domestic product, would likely grow by 6 percent in 2023 and 6.2 percent in 2024.
Its 2023 growth forecast for the Philippines is the fastest among major Southeast Asian economies. The ADB sees Vietnam growing 5.8 percent; Indonesia, 4.8 percent; Malaysia, 4.7 percent; Thailand, 3.7 percent and Singapore, 1.5 percent in 2023.
The ADB also expects the Philippines to expand 6.2 percent in 2024, the same assumption for Vietnam.
Southeast Asia’s growth prospects were downgraded slightly from 4.7 percent to 4.6 percent in 2023 and from 5.0 percent to 4.9 percent in 2024, reflecting weaker global demand for manufactured exports.
Its growth forecast for the Philippines is within the low end of the government’s target range of 6 percent to 7 percent this year.
The Philippine economy expanded 7.6 percent in 2022, faster than 5.7 percent in 2021. It grew by 6.4 percent in the first quarter of 2023, driven by robust investment and private consumption as well as rising employment, expanding production and retail sales, and brisk private and public construction
ADB also maintained its growth outlook for developing economies in Asia and the Pacific at 4.8 percent this year, as robust domestic demand continues to support the region’s recovery.
Inflation in developing Asia is forecast at 3.6 percent this year, compared with an April forecast of 4.2 percent. It raised the inflation outlook for 2024 to 3.4 percent from an earlier estimate of 3.3 percent.
It kept its inflation forecast for the Philippines at 6.2 percent in 2023 and 4.0 percent in 2014.
The ADB said the reopening of the People’s Republic of China is bolstering the region’s growth. The PRC’s economy is projected to expand 5 percent this year, unchanged from the April forecast, amid strong domestic demand in the services sector.
Demand for developing Asia’s exports of electronics and other manufactured goods is slowing, as monetary tightening drags on economic activity in major advanced economies. The region’s growth forecast for next year was marginally revised down to 4.7 percent from a 4.8 percent estimate in April.
“Asia and the Pacific continues to recover from the pandemic at a steady pace,” said ADB chief economist Albert Park.
“Domestic demand and services activity are driving growth, while many economies are also benefiting from a strong recovery in tourism. However, industrial activity and exports remain weak, and the outlook for global growth and demand next year has worsened,” he said.