MANILA, Oct. 4 (Xinhua) -- The World Bank downgraded on Thursday its economic growth prospects for the Philippines for 2018 to 6.5 percent from the earlier forecast of 6.7 percent amid slower-than-expected growth in the first six months of this year.
The report named Philippine Economic Update released by the World Bank said that "heightened global market uncertainty and rising domestic inflation weighed on the Philippine economy in the first half of 2018."
"The Philippines' economic growth outlook remains positive, yet downside risks have increased." the report pointed out.
The report added that an expected slowdown in global trade in the medium term is likely to further dampen Philippine exports.
Nevertheless, the report said baseline economic growth is projected at 6.5 percent in 2018, 6.7 percent in 2019, and 6.6 percent in 2020.
The report also cautioned that persistent high domestic inflation could have a dampening effect on consumption and investment growth.
To manage these risks, Mara Warwick, the World Bank Country Director for Brunei Darussalam, Malaysia, Philippines and Thailand, said that "maintaining strong macroeconomic fundamentals is key."
"At the same time, accelerating structural reforms to improve investments in physical infrastructure and make better use of capital, labor, and technology to increase productivity remains a very important agenda for the Philippines," Warwick said.
In the long-term, Warwick said "sustaining high productivity growth is critical for the country to become a prosperous society free of poverty."
To the World Bank report, the Philippine Presidential Spokesman Harry Roque responded that the government "respect the lowering of the forecast".
"We note that the lowering is not really a major lowering. It's (zero) point two. We expect the Philippine economy to still grow at a very robust growth rate of 6.5," he said.
Earlier, the Asian Development Bank (ADB) and the International Monetary Fund (IMF) both lowered the Philippines' gross domestic product (GDP) growth forecasts in 2018.