7-8% GDP for 2019 ‘’doable”: Gunigundo
The Bangko Sentral ng Pilipinas (BSP) on Thursday said it expects 2019 overall growth to grow between seven to eight percent.
“We expect GDP (gross domestic product) growth between seven to eight percent. I think this is doable,” BSP Deputy Governor Diwa Guinigundo said at the Foreign Correspondents Association of the Philippines Prospects Forum in Makati City.
Guinigundo said this forecast is possible since inflation has gone down and continuous public spending will support economic growth.
“Since the inflation rate has gone down, so we expect consumption expenditure to grow in a bigger way. Second with continuous public spending, we do expect that growth will receive further support. In terms of investment, with the cost of doing business coming down with lower inflation, I think private investment can also be expected in a bigger way,” the deputy governor explained.
He said robust monetary, financial and external sectors will support growth over the near and medium term.
Gunigundo added that government’s commitment to pursue infrastructure and reform agenda will help promote globally competitive industries to sustain growth.
Third quarter GDP was recorded at 6.3 percent, slower than the 6.8 percent growth in the same period 2017.
The government needs to grow at least 7 percent in the fourth quarter to attain their low-end 6.5 to 6.9 percent revised 20118 target.
For their inflation rate forecast, Guinigundo said it has shifted lower with the decline in world crude oil prices, normalized food supply and stable peso-dollar exchange rate.
“So in 2018, the average inflation was 5.2 percent. What do we expect for the next two years? We expect inflation to come down to 3.2 percent in 2019 and further to 3 percent by 2020,” he said.
But according to Guinigundo, the ‘’upside risk for this year’s inflation rate will include possible adjustment in electricity rates, faster than expected monetary policy, normalization and advanced economies particularly in the United States.’’
A proposed increase in taxes of alcoholic beverages is also factor, added Gunigundo.
For the downside risk, he said it is the possible softening of global economic growth
“Therefore, looking ahead we should be able to leave solid footprints in terms of more sustainable, more inclusive and more durable economic growth that will benefit the most of our people,” said Guinigundo. Ella Dionisio/DMS