Manila, Aug. 9, (dpa-AFX/GNA) - The Philippine economy grew well short of expectations in the second quarter as high inflation weighed on household spending and weak global demand and higher imports dampened net trade.
Gross domestic product grew 7.4% on a yearly basis in the second quarter, the Philippine Statistics Authority said Tuesday.
This was slower than the revised 8.2% increase in the first quarter and economists’ forecast of 8.6%. It also marked the weakest expansion in three quarters.
On the expenditure-side, household spending grew at a slower pace of 8.6% after rising 10% percent quarter ago. On the other hand, growth in government expenditure accelerated to 11.1% from 3.6%.
Exports of goods and services climbed 4.3%, while imports grew markedly by 13.6%.
Quarter-on-quarter, GDP fell 0.1%, confounding expectations for an expansion of 0.5%.
The economy is facing the triple threat of accelerating inflation, rising borrowing costs and a relatively high debt-to-GDP ratio, ING economist Nicholas Mapa said.
Economic growth is set to settle at the lower-end of the government’s 6.5% to 7.5% target.
Despite the disappointing growth report, the central bank is likely to maintain its hawkish bias for the rest of the year, the economist added.
Capital Economics’ economist Gareth Leather said growth is set to remain subdued in the second half of 2022 as high commodity prices, rising interest rates and weaker global demand drag on the economy.
In a separate communiqué, the statistical office said the trade deficit widened to $5.84 billion in June from $3.33 billion a year ago. In May, the trade shortfall was $5.55 billion. In June, growth in exports eased to 1% from 6.4% in May. At the same time, imports advanced 26% after a 30.2% rise in May.
GNA