NEDA sees 3.275% GDP growth this year

The government is projecting gross domestic product (GDP) to grow by 2.7 percent in the third quarter and 3.9 percent in the fourth quarter.

On the other hand, inflation rate for the third quarter is projected to slow down to 6.5 percent and even lower in the fourth quarter at five percent.

Data from the National Economic and Development Authority (NEDA) – also show that GNP or gross national product is projected to grow by 3.4 percent in the third quarter and 4.8 percent in the fourth quarter.

By the end of the year, if these targets are met, the GDP growth will average just 3.275 percent compared to the full-year projection of 3.3 to 3.8 percent.

On the other hand, GNP will grow just a tad lower than the full-year projection of 3.8 to 4.3 percent at 3.75 percent.

For the third quarter, the agriculture, fishery and forestry sector is projected to grow at 1.8 percent and five percent in the fourth quarter.

The industry sector is forecast to grow by 2.2 percent and 1.9 percent, respectively in the third and fourth quarter; while the services sector is expected to post a growth rate of 3.4 percent and 4.9 percent for the remaining quarters.

Sources said these projections will further be firmed up when the technical working group of the interagency Development Budget Coordinating Committee will meet this week to review NEDA’s projections.

Earlier, Socioeconomic Planning Secretary Dante Canlas said despite inherent risks and the continued slowdown in the economics of its major trading partners, government is confident economic growth which performed better than expected in the first semester, can be sustained for the rest of the year.

Canlas said government believes that this year’s GDP target of 3.3-3.8 percent and 3.8-4.3 percent GNP can still be achieved.

For 2002, government is sticking to its GDP target of 4.3-4.8 percent; GNP – 4.6-5.2 percent; interest rates – 10-11 percent; foreign exchange rate of P50 to P51 to the dollar and a budget deficit of P130 billion. Exports on the other hand, are projected to grow by 4.7-5.2 percent while imports will pick up by 6-6.5 percent.

The government is also looking at a revenue target of P556.2 billion for this year and P624 billion for 2002.

Government also expects to meet its tax revenue goal of P499 billion in 2001, and 8.4-percent increase from 2000.

"We don’t see a revision of these forecasts as necessary at this point," Canlas said.

Canlas said government’s confidence of a sustained growth already factored in the global economic slowdown which he said "poses obstacles to exports."

The country’s two major trading partners, US and Japan, are not seen to post their much-anticipated early recovery in the early part of 2002.

Canlas said government’s optimism is based on the strong growth in personal consumption which he noted grew by 3.4 percent in the first semester.

"Growth in domestic demand underpinned the second quarter growth and offset the weakening of net exports growth."

Canlas however, warned of the inherent risks which he said, could have an adverse impact on the economy if government fails to address these concerns.

He said government needs to tackle the peace and order problems which continues to make investors reluctant to park their money in the country.