Accelerating inflation seen to hurt consumer spending, growth this year
THE Philippine economy may grow slower than initially expected this year, as accelerating inflation may hurt consumer spending, an economist said.
Security Bank Corp. Chief Economist Robert Dan J. Roces said he now expects gross domestic product (GDP) to expand by 6% in 2022, slower than the previous forecast of 6.5%. This is below the 7-9% growth target set by economic managers this year.
鈥淲e鈥檙e anticipating slower domestic consumption because of inflation. We鈥檙e seeing that emanate from rising commodity prices, due mostly because of the war, the war, so that could dampen recovery, although it鈥檚 not going to drain it,鈥 he said at the bank鈥檚 virtual economic forum held on Thursday.
The central bank now expects inflation to reach 4.3% amid the surge in oil and commodity prices due to the Russia-Ukraine war. The consumer price index rose by 4% in March, already matching the upper end of the 2-4% target.
Ateneo de Manila University professor and former Socioeconomic Planning Secretary Cielito F. Habito said economic growth this year may get a boost from the election campaign. He said elections in the past contributed about one percentage point to growth, although this could be less now.
鈥淭his time, in the sense, a lot of it going into expenses in both mainstream and social media and perhaps a large part of it in social media,鈥 Mr. Habito said.
鈥淭o that extent, or it鈥檚 not going as much into manufacturing and services. The effect of that will not be as inclusive or broadly benefiting,鈥 he added. 鈥 Luz Wendy T. Noble
