Private sector economists said Wednesday the government’s 2023 economic growth target of 6 percent to 7 percent could be achieved despite the lower-than-expected expansion of 5.3 percent in the first half.
The economists said in the August 2023 issue of The Market Call published by First Metro Investment Corp. and the University of Asia & the Pacific the latest economic indicators pointed to a positive outlook in the second half.
“Despite the slowdown in GDP expansion to 4.3 percent year-on-year in Q2, other key economic data do not preclude a full-year growth of 6 percent to 7 percent,” they said.
“Sustained job growth, especially in manufacturing, construction [for industry], accommodation and food services and other services and a slight uptick in exports, with an added boost from the peso depreciation in August, provide some glow for the economy,” they said.
They said that apart from inflation slowing to 4.7 percent in July, the government would likely ramp up spending in the second half, especially in infrastructure, which would also benefit from ongoing major public-private partnership projects.
The gross domestic product growth slowed to 4.3 percent in the second quarter from 7.5 percent a year ago, amid the uncertain global environment highlighted by elevated inflation and higher interest rates.
It was the slowest GDP growth since the first quarter of 2021 and was slower than 6.4 percent in the first quarter. This brought the first-half average to 5.3 percent, below the target range for the year.
National Economic and Development Authority Secretary Arsenio Balisacan said earlier the government was sticking to the growth target despite the sluggish performance in the second quarter.
FMIC and UA&P economists said the higher crude oil and rice prices remained the headwinds for the economy, albeit transitory, and these would again enlarge trade deficits and put upward pressure on the peso in the third quarter amid the elevated foreign interest rates.