2024 GDP analyst forecasts match govt’s below-target estimate  

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The consensus among private sector analysts and multilateral institutions matches the government’s estimate that the country’s gross domestic product (GDP) likely missed the official target of 6 to 6.5 percent.

The Philippine Statistics Authority (PSA) is scheduled to release today the country’s national accounts for 2024, which cover the GDP or the total value of all goods and services produced by the country in a given period.

While GDP is expected to have eclipsed the 5.6 percent expansion in 2023, the consensus is that it fell short of the government’s own estimates.

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Analysts and multilateral institutions calculated that the economy expanded by less than 6 percent last year, despite some optimism at 6 percent.

In December, the Development Budget Coordination Committee assumed a 6 to 6.5 percent growth as the official target for2024.

The numbers were a reflection of downward adjustments from an earlier assumption of 6.5 to 7.5 percent early last year, after taking into consideration various factors, particularly adverse impact of bad weather on the economy.

The PSA previously reported a weaker-than-expected 5.2 percent growth in the third quarter of 2024, which dragged average GDP growth to 5.8 percent in the first nine months.

The slowdown was due to the contraction in agriculture, according to the National Economic and Development Authority (NEDA), citing the combined effects of El Niño, La Niña and the successive typhoons that hit the country in the fourth quarter.

The typhoons caused supply chain disruptions and compelled the government to suspend classes and work in government offices, as well, NEDA said.

Since more weather disturbances hit the country in the fourth quarter, Finance Secretary Ralph Recto conceded that economic growth in 2024 likely fell below the government’s own growth target.

“We probably did not hit our growth targets in 2024 because of the numerous typhoons,” Recto said in a recent interview with reporters this January.

Recto, however, said that growth in the fourth quarter of 2024 could be faster than the 5.2 percent recorded in July to Sept.

In an interview with Malaya Business Insight through Viber on Tuesday, most individuals shared the same views.

Michael Enriquez, president of Sun Life Investment Management and Trust Corp., said the company sees a 5.6 percent growth for full year 2024, and a 6 percent expansion in the fourth quarter.

“Consumer spending picked up as well as government spending,” Enriquez said, citing the fourth quarter’s growth drivers.

John Paolo Rivera, Philippine Institute for Development Studies senior research fellow, is betting that the economy expanded by 5.8 percent for the whole of 2024.

“The high interest rate environment, weak currency and natural calamities may have impeded growth,” he said.

Rivera’s fourth quarter estimate is similar to Enriquez’s 6 percent forecast, driven by higher levels of consumer and government spending.

“Other indicators supporting this were the low unemployment experienced in November and December. Increased activity in the manufacturing sector in November also contributed,” Rivera said.

Michael Ricafort, Rizal Commercial Banking Corp. chief economist, expects a slightly higher full-year growth of 5.9 percent and 6.2 percent in the fourth quarter.

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“The seasonal increase in demand and sales during the Christmas season. Consumer spending would be one major contributor to growth, amid easing inflation – relatively benign inflation,” Ricafort said.

“Preparations for the May 2025 midterm elections would have also led to faster government spending especially on infrastructure in the latter part of 2024,” he added, but pointed out those expansion drivers could have been offset by the series of typhoons that likely weighed on agriculture output.

Manila-based Asian Development Bank in December estimated a 6 percent full-year growth, while the World Bank saw an expansion of 5.9 percent.

Just last week, the ASEAN+3 Macroeconomic Research Office (AMRO) estimated the economy to have grown by 5.8 percent.

Despite the possibility of having a GDP growth below the government’s target, AMRO’s recent report showed the Philippine economy as one of the strongest performers in the region.

In the ASEAN+3 region, the Philippines has the second highest growth estimate based on AMRO’s report, only next to the projections for Vietnam at 7.1 percent for 2024.

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