The World Bank (WB) expects East Asia and the Pacific to grow by 5.9 percent this and next year but will ease further to 5.8 percent in 2021, amid projected slower growth for China while the higher tariffs on trade with the United States is seen to weigh down on growth next year.
“This outlook is predicated on a deceleration in global trade, no further escalation of trade tensions between China and the United States, broadly stable commodity prices, and supportive global financing conditions, especially in the near term,” the WB said in its June issue of its Global Economic Prospects titled “Heightened Tensions, Subdued Investments.”
The global lender noted that growth among commodity importers is expected to moderate in 2020-2021, reflecting capacity constraints and subdued external demand.
“Domestic demand will continue benefiting from favorable financing conditions amid low inflation and rising capital flows (Cambodia, the Philippines, Thailand, Vietnam),” it said.
In the Philippines, the Bank pointed out that private consumption is rebounding amid slowing inflation and improving employment conditions.
“In addition, election-related spending in the first half of 2019 is giving the economy an additional boost and is partly mitigating the impact of weakening exports,” it said.
The report further said regional economies will continue to benefit from pan-Asian infrastructure investments and expanding intra-regional trade, despite weaker-than-expected global growth and investment.
“The investment outlook is favorable in commodity importing economies. Some countries will benefit from large public infrastructure projects coming onstream in 2020-21 (Thailand, the Philippines),” it added.
The World Bank has maintained its growth projection for the Philippines at 6.4 percent this year.