PH economic growth seen picking up in H2

ECONOMIC activity is expected to pick up in the last six months of 2023 but full-year gross domestic product (GDP) growth will come in below target, private sector economists said.

Government spending will help drive the acceleration along with a rebound in employment, they said in the latest edition of First Metro Investment Corp. (FMIC) and the University of Asia and the Pacific's (UA&P) The Market Call report.

GDP growth was a lower-than-expected 4.3 percent in the second quarter, primarily due to a contraction in government spending. This brought year-to-date growth to 5.3 percent, below the government's 6.0- to 7.0-percent target.

State spending has since accelerated, the economists noted.

"[W]e think GDP can still expand by 5.0-5.2 percent in Q3 (the third quarter) and above-6 percent in Q4 (fourth quarter). This would bring full-year GDP growth to 5.5 percent, a bit below the 6 percent-7 percent target of the government."

Economic managers have said that hitting the 2023 goal would be «challenging» but insist that the lower end is still within reach. Government agencies, in particular, were ordered to ramp up spending for the rest of the year.

The UA&P and FMIC economists said that a sharp third-quarter rebound, however, should not be expected given the impact of heavy rains in July and August.

In particular, downpours in July were said to have affected employment in the construction, and mining and quarrying sectors. A subsequent drop in consumers going out for travel and other leisure activities also weighed on jobs in the trade and accommodation, and food services industries.

This month, however, «should see a strong rebound in jobs and consumption spending,» the economists said.

National government (NG) spending,