PH economy could miss growth goals in 2023, 2024
The Philippine economy could grow below the government’s 6.5 to 8% target in 2023 and 2024.
According to ING Bank N.V. Manila Senior Economist Nicholas Antonio Mapa, the accelerating inflation, rising borrowing costs, and elevated debt levels will likely cut economic growth this year and in 2023.
China Banking Corp. Chief Economist Domini Velasquez added that inflation has been than the Bangko Sentral ng Pilipinas’ (BSP) set target since April.
“As consumers dip into their savings and shift spending to essential goods, we will likely see a slowdown in consumer spending… Higher interest rates will also force some businesses to put off expansion plans. Moreover, consumers taking out auto and housing loans might also defer their big-ticket spending,” she added.
Velasquez expects a 5.8% GDP growth in 2023, well below the government target.
However, monetary authorities expect the economy to maintain recovery momentum this year.
BSP’s latest records show that the country’s GDP grew by 7.8% in the first half of 2022. The central bank also noted that mobility indicators have increased since May as most areas retained their most relaxed alert levels.
The implementation of full face-to-face classes next month is expected to lower household mobility and increase mobility to other location categories.
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