Arsenio Balisacan
Despite the effects of various upward pressures on inflation, which is widely expected to have remained above 6 percent in August, Socioeconomic Planning Secretary Arsenio Balisacan said economic growth targets were still attainable thanks to the reopened domestic economy.
In a statement, he said he continued to be confident about this amid the national government’s limited fiscal space and the slowdown in demand for goods, services and investment opportunities across the globe.
Related to this, Fitch Ratings said in a commentary last week that the world economy saw an unusual combination of falling gross domestic product (GDP)—or contracting output—against a backdrop of high and still rising inflation in the first quarter of 2022.
Fitch Ratings said this happened as supply shocks and ongoing pandemic-related disruptions blighted the recovery of the global economy.
The credit watcher said real GDP fell in the second quarter compared to the first quarter in the world’s largest economies, including the United States, China and the United Kingdom.
At the same time, global inflation rose further despite having started the second quarter at already highly elevated levels. Fitch Ratings said monthly data show that pressures are continuing to intensify into the third quarter of this year.
Still, Balisacan said domestic consumption and investments as well as activities in the services sector have propelled the Philippine economy forward as consumers and businesses are already adjusting their economic decisions and expectations to the new normal.
“The most recent data show us that household consumption contributes a significant 85 percent of economic growth on the demand side,” according to the government’s chief economist on Monday.