Near-target 2023 GDP growth acceptable amidst economic challenges – Neda chief

By: Ian Nicolas P. Cigaral - | January 29,2024 - 09:27 AM




MANILA, Philippines — The country’s chief socioeconomic planner, Secretary Arsenio Balisacan of the National Economic and Development Authority (Neda), said that a 2023 economic growth slightly lower than the previous year’s 7.6 percent but near the government’s 6 to 7 percent target range would be considered acceptable, given the challenges faced by the economy.

Balisacan expressed contentment if the 2023 GDP growth, to be released on Jan. 31, aligns with the government’s target range of 6 to 7 percent set during the Marcos administration.

What fueled Balisacan’s optimism was his hope that the fourth quarter growth would be better than the third quarter results.

“Our target is at least to hit the lower-end of the range of 6 to 7 [percent]. And, but you know, I’ll be happy if we get so close to it, even if it’s lower,” he said in an interview at the annual reception for the banking community hosted by the Bangko Sentral ng Pilipinas (BSP) on Friday.

Last month, the inter-agency Development Budget Coordination Committee (DBCC) tempered its GDP growth target for 2024 to 6.5 to 7.5 percent, from the previous goal of 6.5 to 8 percent expansion.

El Niño

What triggered the downgrade was the threat of a prolonged El Niño dry spell, which is predicted to last until the second quarter of this year and may potentially jack up food and energy prices.

Another challenge for the economy is the high interest rate environment that could hurt consumption and investments. Despite inflation easing back to within the government’s 2 to 4 percent target range in December last year, the BSP said it deems it necessary to “keep monetary policy settings sufficiently tight until a sustained downtrend in inflation becomes evident.”

But the DBCC nevertheless retained its 6 to 7 percent growth goal for 2023 as “momentum is expected to continue for the rest of the year and surpass that of our neighboring countries.”

With the January-September average growth now at 5.5 percent, the economy would have to expand by 7.2 percent in the fourth quarter of 2023 to attain at least the low end of the government’s target band.

READ MORE: PH to grow faster but below gov’t target as headwinds persist

GDP seen to grow below gov’t target in 2024 despite revenge spending boost



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TAGS: GDP, NEDA, Philippine economy

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