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Friday, March 29, 2024

Govt cuts GDP growth target

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The government on Monday reduced the gross domestic product growth targets for 2016 and 2017, amid the global economic slowdown and following the lower-than-expected 5.8-percent expansion in 2015.

The inter-agency Development Budget Coordination Committee said it revised downward the 2016 GDP growth target by 0.2 percentage point, from the original range 7 percent to 8 percent to a band of 6.8 percent to 7.8 percent.

It also lowered the 2017 growth target by 0.4 percentage point, from the original range of 7 percent to 8 percent, to a range of 6.6 percent to 7.6 percent. It maintained the 2018 growth target at a range of 7 percent to 8 percent.

The Philippine economy grew 6.3 percent in the fourth quarter, bringing the average growth in 2015 to 5.8 percent, below the target range of 7 percent to 8 percent.

The International Monetary Fund projected that the economy would grow by only 5.7 percent in 2016 and 6.2 percent in 2017, in line with softer world economic growth forecast.

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National Economic and Development Authority assistant director general Rosemarie Edillon said the robust domestic demand would remain the biggest driver of Philippine growth in the next three years.

Budget Secretary Florencio Abad

Budget Secretary Florencio Abad said despite the growth revision and external volatilities, the economy would continue to perform well.

“We are actually looking at domestic demand to make up for external environment [given that] in 2015] domestic demand grew by 8 percent,” Abad said.

The exchange rate target for 2016 to 2018 was also revised from a range of P43 to P46 per US dollar to a band of P45 to P48 a dollar.  The peso closed at 47.45 against the greenback Monday.

The inflation rate target was retained at 2 percent to 4 percent until 2018.

DBCC  also cut the 2016 export growth target to 5 percent from 6 percent previously.  It retained the export growth target for 2017 and 2018 at 8 percent to 10 percent. Merchandise exports fell 5.6 percent in 2015.

DBCC said the 2016 imports growth target was also revised downward to 10 percent from the previous goal of 12 percent. Imports were expected to rise 12 percent in 2017 and 13 percent in 2018, down by 1 percentage point from the previous estimates.

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