WB Lowers PH Growth Forecasts to 6.4% in 2014, 6.7% in 2015

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The World Bank (WB) has slightly lowered its economic growth forecast for the Philippines due to the effects of super-typhoon Yolanda, slow public spending and central banks monetary policy tightening. [caption id="attachment_171678" align="alignright" width="240"] MOTOO KONISHI[/caption] World Bank Philippine Country Director Motoo Konishi said yesterday that the multilateral lender expects the Philippine gross domestic product (GDP) to continue to grow strongly at 6.4 percent this year and 6.7 percent in 2015. This projected growth remains one of the fastest in the East Asia region, second only to China among the major economies, Konishi said in a statement. However, World Banks latest projections are a slight revision from the previous 6.6 percent and 6.9 percent in 2014 and 2015, respectively. The revision reflects the slow start of the economy in the first quarter of 2014 given the effects of typhoon Yolanda, lower government spending in the second quarter, and monetary policy tightening in the first seven months of the year, World Bank said. The Philippine government is aiming for a 6.5 percent to 7.5 percent GDP growth this year, while 7 percent to 8 percent expansion in 2015. World Bank, however, noted that recent data trends suggest that higher growth has now begun to translate into significant poverty reduction. After many years of slow poverty reduction, poverty incidence declined by 3 percentage points from 27.9 percent in 2012 to 24.9 percent in 2013, lifting 2.5 million Filipinos out of poverty, Rogier van den Brink, World Bank lead economist for the Philippines said. And in April this year, the economy created 1.7 million jobs, he added. The World Bank Group estimates that the country needs to spend an additional 5 percent of GDP on health and education to raise labor productivity and competitiveness of Filipino workers. This is on top of the governments planned doubling of infrastructure spending to 5 percent of GDP. …