METROBANK LOWERED its economic growth target for this year, citing potential adverse effects of the increases in the prices of goods and services on consumption.
The bank also cited the lower government spending as another reason for the lower target. From 5.7 percent, Metrobank now sees the economy growing by 5 percent this year.
Inflation is high and this can result in a slowdown in consumption spending, Metrobank said in a paper on the economy. “Growth will happen but slower than we expected at the start of the year.”
The bank changed its forecast after the government reported that the economy grew by only 4.9 percent in the first quarter.
The government said the slowdown in economic growth in the first quarter was blamed partly on external factors, such as the political unrest in the Middle East and North Africa and the disasters in Japan.
While the government was aiming to boost infrastructure spending under the Public-Private Partnership (PPP) program, investments were not expected to pour in until the fourth quarter of this year. As such, the bank said, the full impact of the PPP on the economy might not be felt this year.