In light of the recent news that the economy of the Philippines grew by 5.7% during the 1st quarter of 2024, economic analysts stated that growth should be more than 6% per quarter over the next three quarters in order to meet the set target of the year, according to a BusinessWorld news report.
To put things in perspective, posted below is an excerpt from the BusinessWorld news report. Some parts in boldface…
THE PHILIPPINE ECONOMY should expand by more than 6% in the next three quarters to meet the government’s growth target this year, analysts said.
“The Philippines needs to grow almost 6.1% for the remaining three quarters to reach 6% growth for the entire year, which appears to be a tall order, particularly given the slowdown in household spending in quarter one and the subdued global economic backdrop this year,” Makoto Tsuchiya, an economist at Oxford Economics Japan, said in an e-mail.
Philippine gross domestic product (GDP) grew by 5.7% in the first quarter, slightly faster than the 5.5% in the fourth quarter of 2023 but below the government’s 6-7% target.
University of Asia and the Pacific Senior Economist Cid L. Terosa said GDP growth should average 6-6.5% for the rest of the year to hit the lower end of the government’s target band.
“We had always been expecting growth to stay subdued largely due to the ‘triple threat’ faced by the economy. Elevated inflation, high borrowing costs and fiscal consolidation are the troika of challenges we face,” ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said in an e-mail.
Household spending, which accounts for nearly three-fourths of economic output, rose by 4.6% in the January-to-March, the slowest since the coronavirus pandemic and weaker than 5.3% in the fourth quarter and 6.4% a year ago.
Mr. Tsuchiya said private consumption lagged due to “economic-wide” pressures on spending in the first three months of the year.
“We believe the softening in household consumption was due to a combination of elevated inflation, tepid confidence and the impact of monetary tightening,” Mr. Tsuchiya said.
Inflation quickened to 3.8% in April amid rising food and transport costs. April was the third straight month that inflation accelerated.
Let me end this piece by asking you readers: What is your reaction to this recent development? Do you think that inflation will continue to rise and prevent the Philippines from achieving economic growth of 6% for 2024?
You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.
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