The economy’s growth in 2023 is seen to slow down to an average of 5.35 percent in 2023, amid some headwinds due to global recessionary fears, Sun Life Investment Management and Trust Corp. (SLIMTC) said.
Michael Gerard Enriquez, SLIMTC president, said in a virtual press conference yesterday gross domestic product growth rate is seen to range between 4.3 percent and 6.4 percent, or an average of 5.35 percent.
Enriquez said this is mainly due to base effects, with the economy seen growing by 7.6 percent this year.
“We expect continued growth in consumption and capital outlay, even though global growth slowdown is expected to dampen business and consumer sentiment,” Enriquez said.
Meanwhile, domestic inflation is seen to decelerate to 4.5 percent, as weather and commodity prices dissipate.
Slower global growth should help dampen oil and commodity prices, Enriquez said.
“Short term rates will continue to be elevated, but we expect long term rates to start going down. We still see the BSP (Bangko Sentral ng Pilipinas) will continue to hike as we are still not out of the woods yet on inflation. We still have yet to see inflation peak locally,” Enriquez said.
“We expect BSP to hike but the hiking will be probably at a lower pace than the Fed as what we previously expected or seeing that the BSP was quite aggressive and in fact has made several off cycle rate hikes…as inflation continues to weigh down, and nearing its peak, we’ll probably see the BSP hike at a lesser degree than the Fed, so that will be welcoming. …we expect rates to start stabilizing starting next year,” he added.
Enriquez saidthe peso-dollar exchange rate is still seen to close near 56 by yearend, but may move up to a higher range for next year.
Enriquez’s forecast for the foreign exchange rate next year is 57.50 to a dollar.
“Persistent inflation could prolong the Fed to hike aggressively, which can further strengthen the US dollar,” Enriquez said.
Equity markets are expected to recover as interest rates stabilize, Enriquez said. – Angela Celis
