Philippines beats growth forecast despite soaring inflation

The surprising performance was driven by increased spending on restaurants, hotels and travel, as well as investments

Read more...
Photo: AFP

By AFP

Published: Thu 10 Nov 2022, 10:06 AM

Last updated: Thu 10 Nov 2022, 2:51 PM

Philippine economic growth beat expectations in the third quarter despite soaring inflation, officials said on Thursday, spurred by an increase in household spending as people get back to "pre-pandemic life".

Gross domestic product rose 7.6 per cent, beating expectations of 6.3 per cent as well as the seven per cent growth seen in the same quarter last year, Socio-economic Planning Secretary Arsenio Balisacan said at a briefing.

The surprising performance was driven by increased spending on restaurants, hotels and travel, as well as investments, as schools restarted face-to-face classes and Covid-19 restrictions were lifted.

Advertising
Advertising

"This turnout signifies that Filipino families are close to returning to pre-pandemic life," Balisacan said.

"Having been deprived of mobility for two years, you just want to go out and see the world again."

Still, he warned that the country faced a "considerable burden" from high inflation and the impact of recent tropical storms that badly damaged crops.

Inflation hit 7.7 per cent in October — the highest in nearly 14 years, due to surging food prices.

Like central banks around the world, Philippine monetary policymakers have flagged that further interest rates were needed to tame inflation.

"The economy could have been stronger [in the third quarter] if not for this inflation," said Balisacan.

The country was on track to meet the government's annual growth target of 6.5 - 7.5 per cent, he added.

London-based Capital Economics expects Philippines' growth to slow in the coming months, as the higher cost of living and weaker global demand bite.

"We think economic growth will slow from seven per cent this year to just five per cent in 2023," said Gareth Leather, senior Asia economist.

ALSO READ:

AFP

Published: Thu 10 Nov 2022, 10:06 AM

Last updated: Thu 10 Nov 2022, 2:51 PM

Recommended for you