India with a GDP of $2.7T ranked the 7th largest economy in the world, while Russia ranked 11th with $1.7T. By GDP 5-years average growth and GDP per capita, India and Russia ranked 6th vs 162nd and 150th vs 68th, respectively.
Only Vietnam and China did better. The Philippine economy grew from 6. Growth was anchored in strong exports, while investment growth significantly slowed and consumption growth moderated.
Investment growth slowed in 2017, following two consecutive years of rapid expansion, and climbing inflation slowed real wage growth and contributed to Is Russia richer than India? moderation in private consumption growth.
Sustained economic growth is likely to continue to contribute to poverty reduction.
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These projections would imply a continuing trend of one million Filipinos being lifted out of poverty each year. The Philippine economy is projected to continue on its expansionary path and grow at an annual rate of 6. In 2020, growth is expected to level at 6. The economy is currently growing at its potential, making productive investment in physical and human capital essential so that the economy can continue to grow along its current growth trajectory.
Moreover, the government needs to clarify the role of the private sector in its investment program.
Domestic risks are becoming more prominent. Inflationary pressure is expected to intensify in 2018 due to both domestic and external factors.
The Philippine economy is also at risk of overheating. External risks remain present, especially a faster-than-expected policy normalization in advanced economies that could trigger financial volatility and increase capital outflows from the Philippines.
Renewed protectionist sentiments in several advanced economies will also elevate policy uncertainty, which may disrupt trade and investments. Higher real wages are essential to achieve shared prosperity and inclusive growth. In recent years, the Philippine economy has made great strides in delivering inclusive growth, evidenced by the declining poverty rates and a falling Gini coefficient.
Unemployment has reached historic low rates, but underemployment remains high, near its 18-20 percent decade-long average. More importantly, unlike its high-performing East Asian neighbors with booming manufacturing sectors that provide large numbers of labor-intensive jobs, a majority of Filipino workers that transition out of agriculture generally end up in low-end service jobs. Thus, while employment increased between 2006 and 2015, mean wages remained stagnant, with only a four percent increase in real terms over the same period.
Low job quality and slow growth of real wages are the missing links to higher shared prosperity.