MANILA, April 11 (Xinhua) -- The Philippine economy is expected to post faster growth this year and next on the back of slowing inflation, stronger and broad-based domestic demand, and higher public investment, according to the latest Asian Development Bank (ADB) report released Thursday.
The ADB's flagship economic publication, Asian Development Outlook (ADO) 2024, forecast Philippine economic growth at 6 percent this year, further picking up pace at 6.2 percent in 2025 following an expected easing of monetary policy after a series of rate hikes.
The Philippines will continue to be among the fastest-growing economies in Southeast Asia this year and the next, the report added.
However, severe weather events such as a prolonged El Nino dry weather episode and possible strong typhoons later in the year due to the La Nina phenomenon could result in inflation pressures.
A sharper slowdown in major advanced economies, heightened geopolitical tensions, and higher-than-expected global commodity prices could also weigh on growth, the report said.
"The Philippines' growth momentum is picking up speed," said ADB Philippines Country Director Pavit Ramachandran, adding that investments in large public infrastructure projects and much-needed social services will boost government expenditures and bode well for the economy in the long run.
A low unemployment rate of 4.5 percent in January, below the country's pre-pandemic average, continues to support household spending. Strong retail trade, higher tourist arrivals and receipts, and an expansion in business services will sustain growth in the services sector, which accounts for over half of gross domestic product and employment, said the report.
Furthermore, inflation is expected to moderate to 3.8 percent in 2024 and 3.4 percent in 2025, falling within the central bank's 2 percent to 4 percent target range.
According to the report, decelerating global oil prices and an extension in reduced tariffs on major food items, including rice, corn, and pork, will help contain food inflation. ■