MANILA, Sept. 21 (Xinhua) -- A strong rebound in domestic demand with the easing of COVID-19 pandemic mobility restrictions in the Philippines will support 6.5 percent growth for the Southeast Asian country's economy in 2022, despite higher inflation due to global and local price pressures, according to an updated Asian Development Bank (ADB) report released on Wednesday.
The Asian Development Outlook 2022 Update says the growth projection for 2023 is kept at 6.3 percent as monetary policy tightening and accelerating inflation both crimp domestic demand.
Inflation is expected to quicken to 5.3 percent in 2022, underpinned by sharp upward shocks to global energy and commodity prices.
The negative impact of natural disasters on domestic agricultural supply will likely lead to higher food prices until the end of the year. The report retains the inflation forecast for 2023 at 4.3 percent since the return to steady economic growth will keep inflation relatively stable, with energy prices likely to decelerate.
"The normalization of socioeconomic activity will usher the Philippine economy to a steady, pre-pandemic pace of expansion," said ADB Philippines Country Director Kelly Bird.
He added the recovery in tourism and private investments, coupled with sustained public spending on large infrastructure projects and remittances from overseas Filipinos, will bolster the country's economic recovery this year.
However, according to the report, downside risks to the growth outlook could come from a sharper slowdown in major advanced economies, heightened geopolitical tensions, and possibly sustained elevated global commodity prices. ■