World Bank cuts 2013, 2014 Philippine growth estimates after typhoon Haiyan

World Bank cuts 2013, 2014 Philippine growth estimates after typhoon Haiyan

MANILA - The World Bank said it has lowered its growth forecasts for the Philippines this year and 2014 following a strong typhoon that devastated its central provinces, but recovery and reconstruction efforts should boost economic growth in 2015.

Growth in the Philippines, one of Asia's fastest growing economies, is likely to hit 6.9 per cent this year and 6.5 per cent in 2014, the World Bank said in a statement released on Saturday, lower than its previous forecasts of 7.0 per cent and 6.7 per cent, respectively.

The Philippines expects growth to slow sharply in the fourth quarter, with the typhoon shaving off as much as 0.8 percentage point in GDP, after cooling to its lowest in more than a year in the September quarter. But it still expects full-year 2013 GDP to come in near the high end of a 6-7 per cent target.

Haiyan, one of the strongest typhoons to ever hit land, tore through central Philippines nearly a month ago, reducing most of what was in its path to rubble. It killed at least 5,796 people with 1,779 others still missing, and displaced nearly 4 million.

But rebuilding of public infrastructure, livelihoods and the delivery of social safety net programmes for the poor and the most vulnerable should power growth in 2015, with GDP expected to reach 7.1 per cent, higher than an earlier forecast of 6.8 per cent, Rogier van den Brink, World Bank lead economist, said in the statement.

The World Bank also said its board of directors had approved a US$500-million (S$624 million) quick-disbursing budget support loan, part of a loan package of around $1 billion to aid the Philippines'recovery and reconstruction efforts.

The government has said it will set aside about 41 billion pesos (S$1.16 billion) to finance immediate typhoon relief and recovery efforts, including shelter assistance and restoration of vital public infrastructure, and livelihood support such as cash-for-work programmes.

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