- Details
- Category: Economy
- Published on Monday, 11 February 2013 20:41
- Written by InterAksyon.com
Global Source raised its economic growth forecast for the Philippines this year in anticipation of higher government expenditures, election-related spending and private investments.
In a report, the New York-based think tank said the Philippines increased its gross domestic product (GDP) growth forecast to 6.1 percent from the earlier estimate of 5 percent.
Global Source’s new forecast is within the government’s target range of 6 percent to 7 percent, but is lower than the Philippines’s 6.6-percent GDP growth.
GDP refers to the total amount of final goods and services produced in the country, and as such is a key indicator of economic performance.
For 2014, Global Source forecast growth to slow to 5.8 percent, way below the government’s target range of 6.5 percent to 7.5 percent.
“In our central scenario, we hinge our higher-than-consensus growth on the domestic macro policy environment continuing to be supportive particularly in terms of higher government spending, further expansions in private investments and election spending aiding consumption growth,” Global Source said.
It however said external risks remain, citing the US and EU debt crises, as well as oil prices.
“A number of things can drag growth lower. The worst case would involve a sharper fiscal contraction in the US and deeper recession in Europe with China unable to pick up the slack due to internal excesses built up over the years,” the consulting firm said.
“Tensions in the Middle East may again flare up reversing the forecast downtrend in oil prices. Internally, remaining bureaucratic bottlenecks may again stall government spending keeping a lid on investment ratios and souring investor moods,” Global Source said.
Under its best-case scenario, the global recovery would quicken, thus adding an external boost to the Philippines’s growth prospects.
InterAksyon.com
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