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Philippines sustains strong growth amidst difficult global environment

Staff writer |
Growth in Developing East Asia and Pacific has remained resilient and is expected to ease only modestly during 2016-2018, according to a new World Bank report.

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This outlook is subject to elevated risks and countries should continue to prioritize monetary and fiscal policies that reduce vulnerabilities and strengthen credibility, while deepening structural reforms.

Growth in developing East Asia is expected to ease from 6.5 percent in 2015 to 6.3 percent in 2016 and 6.2 percent in 2017-18. The forecast reflects China’s gradual shift to slower, more sustainable growth, expected to be 6.7 percent in 2016 and 6.5 percent in 2017, compared with 6.9 percent in 2015.

The East Asia and Pacific Economic Update examines the region’s growth prospects against a challenging backdrop: slow growth in high-income countries, a broad slowdown across emerging markets, weak global trade, persistently low commodity prices, and increasingly volatile global financial markets.

Not including China, the region’s developing countries grew by 4.7 percent in 2015, and the pace of growth will pick up slightly — to 4.8 percent in 2016 and 4.9 percent in 2017-18 — driven by growth in the large Southeast Asian economies.

However, the outlook for individual countries varies, depending on their trade and financial relationships with high-income economies and China, as well as their dependence on commodity exports.

Among the large developing Southeast Asian economies, the Philippines and Vietnam have the strongest growth prospects, both expected to grow by more than 6 percent in 2016.

Buoyed by strong private consumption and election spending, the Philippines is projected to grow 6.4 percent in 2016 before tempering slightly to 6.2 percent in 2017.

In Indonesia, growth is forecast at 5.1 percent in 2016 and 5.3 percent in 2017, contingent on the success of recent reforms and implementation of an ambitious public investment program.

Several small economies, including Lao PDR, Mongolia, and Papua New Guinea, will continue to be affected by low commodity prices and weaker external demand.

Cambodia’s growth will be slightly below 7 percent during 2016-18, reflecting weaker prices for agricultural commodities, constrained garment exports, and moderating growth in tourism. In the Pacific Island Countries, growth is likely to remain moderate.


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