RCBC chief economist Michael Ricafort
MANILA – An economist forecasts a gross domestic product (GDP) of at least 5.5 percent next quarter, citing the lower figure to growth normalization.
This, after the Philippine economy surpassed expectations posting a 7.1-percent expansion in the third quarter.
“Easing of low base/denominator effects would lead to a more normalized pace of GDP (gross domestic product) growth of at least +5.5 percent by 4Q (fourth quarter) 2021, for a full year GDP growth of about +5 percent or even higher for both, in view of further measures to reopen the economy with the adoption of smaller scale/granular lockdowns or Alert Level System nationwide possibly by December 2021,” Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort said in a report.
Growth in the first three quarters this year averaged 4.9 percent, the higher-end of the government’s 4 percent to 5 percent growth assumption for the year.
Ricafort said further easing of quarantine restrictions, due largely to strengthened vaccination program against the coronavirus disease 2019 (Covid-19), would allow more robust economic activities, which will result in stronger output for the domestic economy.
“Any additional measures to reopen the economy as justified by increased vaccination towards population and eventually herd immunity would be the more sustainable source of better economic recovery prospects in terms of allowing greater capacity for businesses/industries that entail more investments and employment,” he said.
Ricafort identified other “green shoots” for the economy and these include the resilient overseas Filipino workers’ (OFWs) remittances, the sustained growth of both the exports and imports, recovery of the manufacturing sector, the foreign direct investments (FDIs), and government infrastructure spending.
“Given the country's favorable demographics, with a population of about 110 million or the 12th most populous country in the world and a population growth of about +1.5 percent per year would also fundamentally add to the country's GDP growth,” he added.
Ricafort, however, said risk factors include the elevated domestic inflation rate, which hampers stronger growth in household spending, and the more contagious Covid-19 variants, which may possibly result in stricter movement restrictions and prevent employment growth. (PNA)
