ECONOMIC GROWTH. The gross domestic product grew stronger-than-expected in the third quarter of 2022 at 7.6 percent as the economy continued to reopen. An economist forecasts the economy to expand at least 7 percent in the fourth quarter given the seasonal increase in demand during the Christmas holiday which is expected to lift full year growth higher than the government's 6.5 to 7.6 percent assumption. (PNA file photo)

MANILA – The higher-than-expected expansion of the domestic economy in the third quarter of 2022, at 7.6 percent year-on-year, provides a boost for a possible breach of the government’s gross domestic product (GDP) assumption for the year.
 
In a report on Thursday, Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort said the growth print in the July to September period surpassed expectations given the continued reopening of the economy and the base effects.
 
He also cited the solid growth materialized amid the elevated inflation and interest rates environment due in part to the impact of the ongoing conflict between Russia and Ukraine, which has affected prices of commodities in the international market.
 
“Going forward, Philippine GDP growth for 4Q (fourth quarter) 2022 could still be at least +7 percent due to the continued narrative on economic reopening and quantitatively lower base/denominator effects, thereby leading to average GDP growth of at least 7.6 percent for 2022,” he added.
 
The government’s growth assumption for this year ranges between 6.5 to 7.5 percent while it is between 6.5 to 8 percent for 2023-2028.
 
The third quarter growth print this year is higher than the previous quarter’s upwardly revised 7.5 percent growth and the 7 percent expansion in the third quarter of 2021.
 
GDP as of end-September this year stood at 7.7 percent.
 
Ricafort said the third-quarter economic growth this year benefited from increased economic activities as more people go to the malls and restaurants because of continued opening of the tourism industry and the resumption of face-to-face classes, among others.
 
For the last quarter of the year, he said the seasonal increase in demand due to the Christmas season is expected to further solidify economic activities and the growth of the economy.
 
However, Ricafort said risks remain because of several factors that include the elevated inflation rate and the continued increase in interest rates given the tightening moves by the Federal Reserve and the Bangko Sentral ng Pilipinas, among others.
 
He forecasts the country’s inflation rate to have topped out in the last quarter of this year.
 
“Going forward, the biggest economic growth driver would still be any additional measures to reopen the economy towards greater normalcy as justified by increased vaccination/booster shots towards population and eventually herd immunity,” he added. (PNA)