World Bank expects Philippine inflation to fall within target, forecasts 5.8% GDP growth in 2024
The World Bank anticipates that inflation in the Philippines will align with the government's 2 to 4 percent target next year following the November data, which revealed a further easing to 4.1 percent.
The multilateral lender also projects the country's gross domestic product (GDP) to grow by an average of 5.8 percent in 2024, surpassing the 5.6 percent growth projection for 2023.
World Bank Senior Economist Ralph Van Doorn expressed optimism about the 4.1 percent inflation reading, emphasizing the decline in both food and non-food inflation, bringing them closer to the central bank's target.
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He anticipates a stronger boost to the economy from household consumption during the holiday season and through 2024 as price pressures cool.
While highlighting the positive outlook, Van Doorn also pointed out risks that could impact food and energy prices, including geopolitical tensions, trade restrictions on agricultural products, and weather disturbances like El Niño.
To mitigate these risks, the World Bank recommended that the Philippine government continue using both monetary and non-monetary measures to increase import supply, lower tariffs on key commodities, and improve supply and demand management for food items.
The World Bank emphasized the importance of pro-investment reforms for stimulating medium-term economic growth. Van Doorn noted that the Philippines lags behind neighboring countries in terms of investments.
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He highlighted the significance of investments that increase the country's capital stock and lead to greater productivity.
Van Doorn specifically mentioned the importance of the Public Services Act reform, expecting it to create more competition in key public service sectors, ultimately enhancing service quality and productivity in sectors like manufacturing.
