Hitting GDP growth goal not easy – DoF official
REACHING the government’s full-year economic growth target of 6.5 to 6.9 percent will be a challenge, but it can be done, a senior Finance official said as he predicted a boost in the last three months of 2018.
Asked on Thursday night if attaining the target figure was doable, Finance Secretary Gil Beltran told reporters: “It will be a little difficult, but it’s not impossible.”
His remarks came after the Philippine Statistics Authority (PSA) reported on Thursday morning that the country’s gross domestic product (GDP) decelerated to 6.1 percent in the third quarter, its slowest in three years.
The figure brought year-to-date GDP expansion to 6.3 percent, still below the revised growth target.
Beltran is optimistic, however, that the economy would bounce back in the fourth quarter, as consumption, which grew by only 5.2 percent in July to September from 5.9 percent in April to June, is seen to recover.
“It will be better. Better than the first three quarters. There’s a lot of spending for consumption and for investment,” he said.
Slowing inflation and election spending would support fourth-quarter growth, according to the Finance undersecretary.
The rate of increase in the price of goods and services in October remained at a nine-year high of 6.7 percent for the second consecutive month, prompting the Bangko Sentral ng Pilipinas and economic managers to say that inflation already peaked in the third quarter and is pointing to a downward path.
The country will hold midterm elections on May 13, 2019, which Beltran said could boost GDP growth by about 1 percent.
His view is contrary to analysts’ expectations that economic expansion was poised to decelerate in October to December and fall below the full-year target.
Alex Holmes, Asia economist of London-based research consultancy firm Capital Economics, believes that the “slowdown will continue over the coming quarters as the economy faces headwinds from tighter monetary policy and a weakening external environment.”
IHS Markit Asia-Pacific chief economist Rajiv Biswas warned that the impact of central-bank rate hikes on economic growth “will continue to act as a drag on household consumption in coming quarters, with fourth-quarter GDP growth likely to moderate to a pace of around 6 percent.”
ING Bank Manila senior economist Nicholas Antonio Mapa claimed that fourth-quarter growth was likely to continue to be moderate, with household final consumption seen to decelerate further, and the drag from net trade would likely stay.
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