World Bank lifts PH growth forecast for 2012

The World Bank on Monday raised its growth forecast for the Philippines even as the lender warned of a slowdown in East Asia and the Pacific amid a "fragile" external environment.

In a report, the Washington-based lender said the Philippines' gross domestic product would grow 5 percent this year and in 2013. The latest growth forecast for this year is higher than the 4 percent estimate made last June

The bank's latest forecast however is at the low end of the government target of betwen 5-6 percent for 2012, as well as the lender's 7.2 percent average forecast for East Asia and the Pacific.

In the first six months of the year, the Philippine economy grew by 6.1 percent from last year's 4.2 percent.

The World Bank projected that Indonesia will grow faster at 6.1 percent this year and 6.3 percent in 2013. Likewise, Vietnam is forecast to expand 5.2 percent this year and 5.7 percent next year. Malaysia is seen to clock in growth of 4.8 percent and 4.6 percent, while Thailand, 4.5 percent and 5 percent.

"Within the EAP region, the risk remains of a more pronounced slowdown in China than currently expected, while commodity exporters are at particular risk of a global slowdown," the bank said.

The World Bank said China's GDP growth is projected to slow down to 7.7 percent this year from 9.2 percent last year.  In 2013, however, China’s growth is expected to rebound to 8.1 percent as the impact of stimulus measures kicks in, supported further by an uptick in global trade.

Pamela Cox, World Bank East Asia and Pacific regional vice president said weaker demand for East Asia’s exports is slowing the regional economy. But compared to other parts of the world, East Asia is still growing strongly, and thriving domestic demand will enable the region’s economy to bounce back to 7.6 percent next year.

The report added that considerable downside risks remain should conditions in Europe deteriorate sharply, with the risks high that developing economies might be affected.

"A crisis in the Eurozone will adversely affect the economies in the East Asia and Pacific mainly through trade and links to the financial sector," the bank said.

"Policy makers in the East Asia and Pacific Region will have to continue managing growth and reducing poverty in an environment that will remain volatile. Countries that have experienced rapid expansion of credit need to be cautious, while exporters of commodities should continue to take measures and build institutions that help manage volatile commodity revenues," it added.-Interaksyon (October 08, 2012 10:27AM)