Local output expansion measured as the gross domestic product (GDP) is forecast to reaccelerate in the third quarter and average at least 5.1 percent, analysts at Moody’s Analytics said on Monday.
This compares against actual growth performance of only 4.3 percent in the quarter ended June this year, itself sharply lower than growth averaging 6.4 percent in the first quarter.
“We expect government spending to lift on account of state agencies stepping up the implementation of certain projects, but elevated inflation and high interest rates will weigh on consumer spending,” the analysts at Moody’s said.
Growth across the Philippines fell sharply in the second quarter after having accelerated to 6.1 percent in the first, driven lower by intense costs and elevated interest rates that the monetary authorities are likely to keep elevated over the policy horizon.
Government consumption, a key economic driver during the pandemic years, contracted in the April to June quarter to minus 7.1 percent from an expansion averaging 6.2 percent in the second quarter.
The momentum lost was such that multilateral institutions as the International Monetary Fund (IMF) and the World Bank have recalculated forecast growth for the Philippines lower this year to 5.3 percent instead of 6.2 percent and to 5.6 percent instead of 6 percent, respectively.
According to the Philippine Statistics Authority (PSA), the USD406 billion economy has grown consistently the past nine consecutive quarters and seen growing still at a recomputed rate of 5.3 percent by some analysts this year, including the Manila-based Asian Development Bank.
