Philippines’ 2024 GDP growth may fall short of gov’t target — BPI

BANK of the Philippine Islands (BPI) expects gross domestic product (GDP) growth of 6.2% this year, short of the official government target.

“While significant uncertainties remain, the country may maintain its position as one of the fastest-growing economies in the region with a full year growth rate of 6.2% in 2024,” BPI said in a statement.

BPI’s forecast is below the government’s 6.57.5% target range for GDP growth this year.

GDP growth accelerated to 5.9% in the third quarter, bringing the nine-month average to 5.5%, still below the government’s 6-7% full-year target.

“With the anticipated easing of 2024 inflation, consumer spending may recover in 2024,” BPI said.

The bank sees headline inflation averaging 3.7% this year, within the Bangko Sentral ng Pilipinas’ (BSP) 2-4% target, but cited upside risks like El Niño, which may reduce food harvests and send prices higher.

Inflation is expected to rise again in the second quarter, breaching 4%, before settling within the BSP’s 2-4% target range in the second half.

Inflation slowed to 3.9% in December, settling within the central bank’s 2-4% target for the first time in nearly two years, and easing from 4.1% in November and 8.1% a year earlier. This also was the lowest reading in 22 months or since the 3% posted in February 2022.

Inflation averaged 6% for 2023 from 5.8% in 2022, marking the second straight year of inflation breaching the BSP’s 2-4% target.

BPI sees investment spending ramping up this year, driven by the construction sector and with companies becoming more aggressive in capital expenditures on the expectation that interest rates have peaked. —