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Friday, March 29, 2024

Moody’s says economy likely grew by 6.8% in Q4

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The Philippine economy likely rebounded with a growth of 6.8 percent in the fourth quarter from a sluggish 6.1-percent expansion in the third quarter, on the back of strong private consumption, Moody’s Analytics, a division of Moody’s Corp., said Monday.

Moody’s said in a report this could bring the 2018 GDP growth to 6.5 percent, representing the lower end of the government’s target range of 6.5 percent to 6.9 percent for the year. The Philippine Statistics Authority will announce the official growth figures on Jan. 24.

“GDP growth in the Philippines likely hit 6.8 percent in the fourth quarter, after slowing to 6.1 percent in the third. Improvement is expected in private consumption after a slump in the third quarter on higher food prices squashing discretionary spending,” Moody’s said.

“Imports of goods also accelerated to double digits, a consequence of the government’s large infrastructure spending program. Full-year GDP growth remains on track to expand 6.5 percent in 2018,” Moody’s said.

The gross domestic product grew 6.1 percent in the third quarter, slower than 6.2 percent in the second quarter and 7.2 percent a year ago as high inflation tempered household spending during the period.

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The slower growth in the July-to-September period was linked to the decline in agricultural output that was affected by a series of typhoons.

The interagency Development Budget Coordinating Committee revised downward the 2018 growth projection to a range of 6.5 percent to 6.9 percent from the previous estimate of 7 percent to 8 percent. The DBCC, however, retained the 7 percent to 8 percent projection from 2019 to 2022.

First Metro Investment Corp., the investment banking arm of the Metrobank Group, said last week the economy might grow faster in 2019 by 6.8 percent to 7.2 percent, on the back of consumption spending amid the decelerating inflation rate and strong macroeconomic fundamentals.

First Metro president Rabboni Francis Arjonillo said in an annual economic briefing in Taguig City that the 2019 growth projection was faster compared to 2018 as the economy was expected to regain strength.

“The Philippine economy is again in a growth trajectory. Apart from the country’s strong macroeconomic fundamentals and expected inflation easing this year, another important factor in pushing economic growth is the continued policy reform drive of the Duterte administration,” Arjonillo said.

He said inflation was on a clear downward trend and expected to taper off to 3 percent to 5 percent given the normalization of food supply and lower global oil prices.

Other factors that could contribute to sustained economic expansion are the recovery in manufacturing and increase in tourist arrivals.

Inflation peaked at a nine-year high of 6.7 percent in October, before easing to 6 percent in November and 5.1 percent in December as the immediate measures implemented by the government to curb inflation took effect.

This brought full-year inflation rate to 5.2 percent in 2018.

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