Eco­nomic slow­down

The Freeman - - OPINION -

The na­tional eco­nomic growth has slowed down in the third quar­ter of 2018, the first time since three years ago, rais­ing se­ri­ous fears that the econ­omy will not be able to at­tain the gov­ern­ment’s tar­get for this year.

Statis­tics showed the econ­omy ex­panded 6.1 per­cent from July to Septem­ber, slower than the 6.2 per­cent growth of the pre­vi­ous quar­ter. The growth was the weak­est since the 6.0 per­cent recorded in the sec­ond quar­ter of 2015.

To at­tain the gov­ern­ment’s full-year tar­get of 6.5 per­cent to 6.9 per­cent, the econ­omy must grow at least 7 per­cent in the fourth quar­ter, ac­cord­ing to So­cioe­co­nomic Plan­ning Sec­re­tary Ernesto Per­nia.

The slow­down in the gross do­mes­tic prod­uct has been ex­pected. The weak­en­ing ex­ports be­cause of de­creas­ing global de­mands and the de­creas­ing agri­cul­tural out­put be­cause of the ty­phoons have largely con­trib­uted to slower growth.

The soft­en­ing pub­lic spend­ing due to the ris­ing prices of ba­sic com­modi­ties was also an­other fac­tor. Per­nia, how­ever, said "the slow­down in house­hold spend­ing is deemed to be abat­able and tem­po­rary, but we can only do so much."

Yes, house­hold spend­ing is one cru­cial eco­nomic growth barom­e­ter. A brisk in­crease in con­sumer move­ment would, of course, shove the econ­omy up­ward be­cause it trig­gers more man­u­fac­tur­ing ac­tiv­ity.

But what hap­pened to­day is that given the in­creas­ing com­mod­ity prices in the wake of the im­ple­men­ta­tion of the Tax Re­form for Ac­cel­er­a­tion and In­clu­sion (TRAIN) Law, a large por­tion of the pop­u­la­tion lost a sig­nif­i­cant amount of their pur­chas­ing power.

Eco­nomic ex­perts hope for a ro­bust re­cov­ery in the fourth quar­ter in or­der for the econ­omy to beat the gov­ern­ment’s tar­get for the whole year. But it re­mains to be seen whether the econ­omy will re­bound in the com­ing months. We all know that the ef­fects of TRAIN Law and the ris­ing in­fla­tion are just start­ing to take their toll.

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