Despite risks from high inflation, the Philippine economy is likely to keep its growth at above six percent this year, according to Rahul Bajoria, director of the research unit of UK investment bank Barclays. He also made a bullish forecast for next year, believing that the economy could grow even faster, up from 6.5% for this year. However, growth is being tempered by the acceleration of the inflation rate which is due to supply-side factors and management issues that have resulted in a tightening of supply of rice, fish, meat and vegetables. Bajoria said inflation is projected to peak in the third quarter of this year if it has not already done so, and to drop back to within target levels starting in the second quarter of 2019. Bajoria also forecasts US$6 billion foreign direct investment for the country this year, lower than the record US$10 billion last year. Remittances and BPOs will continue to be the main drivers of economic growth, he added.
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