ECONOMY | Staff Reporter, Philippines

Philippines GDP growth to inch down 6.5% in 2018

But rising domestic consumption and infrastructure projects may still boost its growth.

VP Bank reported an estimated 6.5% GDP growth in the Philippines in 2018, down from last year’s growth of 6.7%.

 “During the last three months, with all sectors, except Consumer Staples (stagnating) we observe downward revisions in earnings expectations. Hence, we fear an overoptimistic stance concerning the region – at least from a short-term point of view,” VP Bank said.

Investments are also expected to fall down from 9.4% in 2017 to 6.9% in 2018. However, government reforms and foreign business revisions will help gather more investments, VP Bank said.

More projects are up for ground-breaking this year, despite previous delays in infrastructure projects. Public construction is expected to expand by 2022, contributing to 7.2% of the country’s GDP.

“With 6.9 %, Philippine’s GDP 3Q17 growth exceeded 6% for the ninth consecutive quarter. However, 70% of the countries domestic value generation is explained by domestic consumption. Latest expansion in public spending has resulted in an acceleration of infrastructure spending and a pick-up in government consumption,” VP Bank said.

Further, inflation rate is expected to inch up from 3.2% to 3.6% YoY in 2018, whilst private consumption will also increase to 6% YoY.

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