PH Economic Team Narrows 2023 Growth Outlook

The Development Budget Coordination Committee (DBCC) said that President Marcos’ economic team has narrowed its growth outlook for 2023 due to global headwinds or factors that may slow down economic growth.

The new inter-agency body set the government’s gross domestic product (GDP) target at a slower pace from 6.5% to 8% for 2023.

Budget Secretary Amenah F. Pangandaman, who chairs the DBCC, said the revision was due to multiple headwinds weighing on the country’s growth.

“This momentum is expected to slightly decelerate in 2023 and range from 6.0% to 7.0% considering external headwinds such as the slowdown in major advanced economies,” Pangandaman said.

The DBCC still expects growth to pick up from 2024 to 2028 at 6.5% to 8%.

Likewise, economic experts expect a faster pace of increase in consumer prices. The DBCC expects inflation to pick up at 5.8% in 2022 from 4.5% to 5.5% due to “persisting high prices of food and transport costs.”

“Nonetheless, inflation is expected to moderate in the medium-term reaching 2.5% to 4.5% in 2023 before returning to the target range of 2.0% to 4.0% in 2024 until 2028,” Pangandaman said.

Meanwhile, the peso-dollar exchange rate assumptions for 2023 to 2024 were adjusted upwards as the peso continues to depreciate due to heightened global uncertainties and the aggressive tightening policy of the US Federal Reserve.

“Nonetheless, the peso is expected to appreciate and stabilize at 53 to 57 in 2024 to 2028, with the BSP’s [Bangko Sentral ng PIlipinas] policy normalization measures and expected pick-up in foreign exchange flows,” Pangandaman said.

As domestic demand recovers, the goods imports growth projection for this year is increased to 20% and revised to 4% in 2023.

“Both trade assumptions reflect the gradual recovery of trade with the normalization of economic activities, globally and domestically,” Pangandaman said.

Source: Manila Bulletin