Accelerated inflation has hit consumer spending, hitting growth this year

The Philippine economy is expected to grow slower than expected earlier this year, as accelerated inflation could hurt consumer spending, an economist said.

Robert Dan J. Rosses, chief economist at Securities Bank Corporation, says he now expects gross domestic product (GDP) to grow by 6% in 2022, slower than the previous forecast of 6.5%. This is less than the 7-9% growth target set by economic managers this year.

“We expect a slowdown in domestic spending due to inflation. We see that rising commodity prices have arisen, not because of the war, so that it may fade the recovery, although it is not going to eliminate it, “he said at the bank’s Virtual Economic Forum on Thursday.

Amid rising oil and commodity prices due to the Russia-Ukraine war, the central bank now expects inflation to reach 4.3%. The consumer price index rose 4% in March, already matching the top edge of the 2-4% target.

Cielito F., professor at Atenio de Manila University and former Secretary of Socio-Economic Planning. Habito says the election campaign could boost economic growth this year. He said that in the past elections had contributed to the growth of almost one percent, although this could be less now.

“This time, of course, a lot of it is being spent on both mainstream and social media, and probably a big part of it on social media,” said Mr Habito.

“It simply came to our notice then. The impact will not be as inclusive or far-reaching, ”he added. – Loose Wendy T. Nobel