The economy grew slightly quicker than expected last year, data showed Wednesday, even as it was hit by high food prices and weakness in overseas markets.
The 5.6 percent expansion in the fourth quarter of 2023 was well down from the 7.6 percent seen in 2022 but beat the 5.5 percent estimated in a survey by Bloomberg.
However, it was below the government’s target of 6 percent to 7 percent for 2023, Socio-Economic Planning Secretary Arsenio Balisacan told reporters.
“We are concerned about the low growth in food spending due to high food prices,” he said, with a serious seasonal dry spell in most of the country expected to hit the laggard farm sector in the early part of this year.
The services sector, household spending, construction, and durable equipment were the key growth drivers, national statistician Dennis Mapa told reporters.
But export growth slowed sharply to just 0.6 percent in the fourth quarter, compared with 5.0 percent a year earlier.
Balisacan added that the government would maintain its 2024 target of 6.5-7.5 percent — a figure analysts warned was too optimistic given the expected weaker global prospects.
“The domestic demand figures suggest that the economy is holding up well against the sharp rise in borrowing costs. But we don’t expect this resilience to last,” said Shivaan Tandon, at Capital Economics.
The October-to-December performance brought the full-year economic growth to 5.6 percent., lower than the government’s target range of 6 percent to 7 percent and slower than 7.6 percent registered in the same period in 2022.
“The main contributors to the fourth quarter 2023 annual growth were: Financial and insurance activities, 11.8 percent; Wholesale and retail trade; repair of motor vehicles and motorcycles, 5.2 percent; and Construction, 8.5 percent,” the PSA said.
For the full year of 2023, the industries which contributed the most to the annual growth were: Wholesale and retail trade; repair of motor vehicles and motorcycles, 5.5 percent; Financial and insurance activities, 8.9 percent; and Construction, 8.8 percent.
The PSA said all major economic sectors, namely: Agriculture, forestry, and fishing (AFF); Industry; and Services posted year-on-year growth in the fourth quarter of 2023 at 1.4 percent, 3.2 percent, and 7.4 percent, respectively.
For the full year of 2023, AFF, Industry, and Services also posted growth in 2023 at 1.2 percent, 3.6 percent, and 7.2 percent, respectively.
On the demand side, Household final consumption expenditure (HFCE) grew year-on-year by 5.3 percent in the fourth quarter of 2023.
Government final consumption expenditure (GFCE) and Exports of goods and services posted annual declines of 1.8 percent and 2.6 percent, respectively.
For the whole 2023, HFCE grew by 5.6 percent; GFCE, 0.4 percent; Gross capital formation, 5.4 percent; Exports of goods and services, 1.3 percent; and Imports of goods and services, 1.6 percent.