The Philippines can also emerge as one of the best-performing economies in Southeast Asia and in the world, which can help attract more investors to the local stock market.
Philippine gross domestic product (GDP) is seen increasing to 6.5 percent to 7.5 percent this year, but global economic growth is projected to reach only 2.4 percent in 2024.
The World Economic Situation and Prospects report from the United Nations (UN) said that the 2.4-percent global economic growth for this year is lower than the projected 2.7-percent increase for 2023.
The Philippines might also emerge as the best-performing economy among countries in the Association of Southeast Asian Nations (ASEAN), according to a World Bank (WB) report late last year.
Global economic growth prospects
While Philippine GDP is expected to increase by 6.5 percent to 7.5 percent this year, the UN report said that major economies like the United States will experience lower economic growth.
The report added that the US economy will see a drop in GDP growth from 2.5 percent in 2023 to 1.4 percent in 2024, while China’s GDP will slow down from 5.3 percent in 2023 to 4.7 percent in 2024.
The report also showed that GDP growth in Europe and Japan is projected at 1.2 percent in 2024. As for Africa, the continent’s GDP growth is forecast to slightly increase from 3.3 percent in 2023 to 3.5 percent in 2024.
UN Secretary-General Antonio Guterres said the World Economic Situation and Prospects report showed that 2024 is “another tough year” for the global economy.
For 2025, the UN report sees global GDP improving moderately to 2.7 percent in 2025, which is still below the pre-pandemic growth rate of 3 percent.
Meanwhile, global inflation is projected to go down further from an estimated 5.7 percent in 2023 to 3.9 percent in 2024, the UN report said.
The UN chief said investments and sustainable development should be made to bring the global economy back on the growth path.
“2024 must be the year when we break out of this quagmire. By unlocking big, bold investments we can drive sustainable development and climate action, and put the global economy on a stronger growth path for all,” Guterres said.
However, the UN report said that about 25 percent of all developing countries will record inflation exceeding 10 percent this year.
For the Philippines, the Bangko Sentral ng Pilipinas (BSP) has set an inflation target of 2.0 to 4.0 percent for this year.
Fortunately, the highest inflation rate the Philippines has logged in the last two years was 8.7 percent in January 2023.
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PH growth among best in ASEAN
Meanwhile among ASEAN member-countries, the Philippines is projected to be among the best performers.
The World Bank sees Philippine GDP growing by 5.6 percent in 2023, which is better than those of Cambodia (5.5 percent), Indonesia (5 percent), Vietnam (4.7 percent), Malaysia (3.9 percent), Laos (3.7 percent), Thailand (3.4 percent), and Myanmar (3.0 percent).
However, the World Bank said that its growth forecast for 2023 for the Philippines should have been higher but the country recorded high inflation rates last year, peaking at 8.7 percent in January.
“GDP growth in the Philippines is projected to moderate to 5.6 percent in 2023 from 7.6 percent in 2022 due to still-elevated inflation, tight financial conditions, and weak external environment,” World Bank senior economist for East Asia and the Pacific Ergys Islamaj said during an online briefing late last year for the East Asia and Pacific Economic Update report.
On the weak external environment, World Bank East Asia and Pacific chief economist Aaditya Mattoo said the “big concern is the slowing global growth.”
However, he said that the Philippine economy is still more dependent on domestic demand or private consumption.
“And the good news in the Philippines, I should say, is that we expect economic activity to be supported by domestic demand to be led by private consumption,” he added.
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