FMIC, UA&P forecast Q2 growth of ‘at least 7%’
Second quarter economic growth will likely pick up to “at least 7 percent” given latest developments, First Metro Investments Corp. and the University of Asia and the Pacific said.
“Muscular real economy indicators, like bulked-up growth in infrastructure spending, capital goods imports and manufacturing ouptput, and foreign direct investments should carry the economy to faster GDP (gross domestic product) growth in Q2…,: they said in the July issue of The Market Call report.
The economy grew by 6.8 percent in the first quarter, below the government’s 7.0-8.0 target for the year.
“The positive data should overcome negative sentiment — e.g., inflation speeding up, peso under siege — in Q2 and set the stage for the higher growth trajectory for the rest of the year,” they added.
Infrastructure spending was said to have surged by 28.5 percent in May following April’s record 95.9 percent, capital goods imports rebounded by 29.3 percent in April after a dip in March, and factory output expanded by 19.8 percent in May after April’s 29 percent.
Inflation, meanwhile, accelerated to 5.2 percent in June from 4.8 percent a month earlier but the Monetary Board also ordered a 25-basis point policy rate hike in June to cool inflation expectations, FMIC and the UA&P said.
“We maintain our view that inflation will have little upside and should taper off starting in Q3,” they added.
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