MANILA, Philippines — Amid the COVID-19 pandemic, the World Bank sees the Philippine economy shrinking by 1.9% this year, a slower pace of contraction than government estimates of negative 2% to 3.4%.
The latest 2020 gross domestic product forecasts of the Washington-based multilateral lender were contained in its June 2020 Global Economic Prospects report released Monday night, Philippine time.
The World Bank expects global GDP to contract by 5.2 percent in 2020, making it the sharpest economic decline since World War II.
In the case of the Philippines, the World Bank said that it, along with Malaysia and Thailand, will “experience the biggest contractions this year” among major economies in the East Asia and Pacific region. The Philippines’ GDP grew by 6% last year.
“This reflects domestic shutdowns, reduced tourism, disrupted trade and manufacturing, and spillovers from financial markets,” the World Bank said.
The World Bank projected Malaysia’s GDP to shrink by 3.1%, and Thailand’s by 5% in 2020.
According to the World Bank, cases of COVID-19 in the Philippines and Indonesia had “not yet peaked,” although these two countries earlier on unveiled “sizable fiscal stimulus packages ranging around 3% to 5% of GDP” to address the health and socioeconomic crises caused by the pandemic.
The Philippine economy was nonetheless expected by the World Bank to revert to growth next year, estimated at 6.2%.
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