MANILA: The Philippine economy is expected to grow 5.6% this year and 5.8% next year, the World Bank said on Tuesday, as a subdued global economy, higher inflation and the lingering impact of the coronavirus pandemic weigh on its prospects.

The projections, in the bank’s Philippines Economic Update, are below the government’s 6%-7% GDP growth target for the year, and its 6.5%-8% forecast for next year and through to 2028.

“The Philippines is subject to global economic forces. And also domestically we’ve just had the pandemic,” World Bank Senior Economist Ralph van Doorn told reporters.

Rising consumer prices and tighter monetary conditions have slowed global growth, and the COVID-19 pandemic in the Philippines have also led to learning losses, which would affect future productivity, van Doorn said.

Some reforms that ease investment inflows and the liberalisation of industries could prop up growth, he added.

Containing inflation remains the key policy challenge for the Philippines, van Doorn said.

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Even as it expects consumer prices to revert back to the central bank’s 2%-4% target range next year, upside risks remain, he added.

Key risks to the growth outlook include an escalation of geopolitical tensions which could lead to supply disruptions in food and power, and the impact of the El Nino weather phenomenon on food supply.

The Philippine economy grew 5.9% in the third quarter, beating expectations as a turnaround in government spending boosted economic expansion.