The World Bank retained its 2024 growth forecast for the Philippines at 5.8 percent, but raised the 2025 outlook to 5.9 percent. It also expects growth to reach 5.9 percent in 2026.
“Over the forecast horizon, GDP [gross domestic product] growth in most EAP economies except China—including Indonesia, Malaysia, and the Philippines—will be anchored by solid growth of private consumption supported by low inflation, declining borrowing costs and firm labor market conditions,” the World Bank said in its latest Global Economic Prospects report.
World Bank senior economist Ralph Van Doorn previously said the growth forecast for the Philippines considered the expectation that inflation would ease, allowing the Bangko Sentral ng Pilipinas to adopt a more accommodative policy stance and spur private investment demand.
The World Bank expects headline inflation in the Philippines to average 3.6 percent this year and decelerate to 3.2 percent in 2025 and 3.0 percent in 2026.
It said the global economy is expected to stabilize for the first time in three years in 2024—but at a level that is weak by recent historical standards.
Global growth is projected to hold steady at 2.6 percent in 2024 before edging up to an average of 2.7 percent in 2025 to 2026. That is well below the 3.1-percent average in the decade before COVID-19.
The forecast implies that over the course of 2024 to 2026, countries that collectively account for more than 80 percent of the world’s population and global GDP would still be growing more slowly than they did in the decade before COVID-19.
It said developing economies are projected to grow 4 percent on average over 2024 to 2025, slightly slower than in 2023.
Growth in low-income economies is expected to accelerate to 5 percent in 2024 from 3.8 percent in 2023. However, the forecasts for 2024 growth reflect downgrades in three out of every four low-income economies since January.
In advanced economies, growth is set to remain steady at 1.5 percent in 2024 before rising to 1.7 percent in 2025.
“Four years after the upheavals caused by the pandemic, conflicts, inflation and monetary tightening, it appears that global economic growth is steadying,” said Indermit Gill, the World Bank Group’s chief economist and senior vice president.
“However, growth is at lower levels than before 2020. Prospects for the world’s poorest economies are even more worrisome. They face punishing levels of debt service, constricting trade possibilities, and costly climate events. Developing economies will have to find ways to encourage private investment, reduce public debt and improve education, health, and basic infrastructure. The poorest among them—especially the 75 countries eligible for concessional assistance from the International Development Association—will not be able to do this without international support,” Gill said.
It said one in four developing economies is expected to remain poorer than it was on the eve of the pandemic in 2019. This proportion is twice as high for countries in fragile- and conflict-affected situations.
Global inflation is expected to moderate to 3.5 percent in 2024 and 2.9 percent in 2025, but the pace of decline is slower than was projected just six months ago.
Many central banks, as a result, are expected to remain cautious in lowering policy interest rates. Global interest rates are likely to remain high by the standards of recent decades—averaging about 4 percent over 2025 to 2026, roughly double the 2000-2019 average.
“Although food and energy prices have moderated across the world, core inflation remains relatively high—and could stay that way,” said Ayhan Kose, the World Bank’s deputy chief economist and director of the Prospects Group.