April 22, 2019
Philippine economic growth could marginally accelerate this year, to 6.3 percent from 6.2 percent in 2018, on the back of higher household spending, an ING Bank Manila economist said.
“Growth this year will likely settle in the 6.0-7.0 target set by the government, although I note that 1H (first half) performance will likely see a dip before an eventual rebound in the last six months of the year,” ING Bank Manila senior economist Nicholas Antonio Mapa told The Manila Times.
“Household final consumption which is roughly 65 percent of the economy will be back with inflation sliding nicely back within the target. Last year, we saw how consumption had taken a back seat, especially in the second half after inflation peaked,” he added.
Above-target inflation, which to 6.7 percent in October, prompted the Bangko Sentral ng Pilipas to raise key rates five consecutive times last year.
Consumer price growth has since eased to 3.3 percent as of March, within the BSP’s 2.0-4.0 percent target.
Risks to growth, Mapa said, include delays in the 2019 national budget and a widening trade gap.
“Given this landscape, we still expect growth to be challenged in the first half,” Mapa said.
Last week’s resolution of the budget impasse, along with expected policy rate cuts and reserve requirement reductions, will contribute to the second semester rebound, he added.
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