OECD cuts PH 2023 growth forecast to 5.6%
MANILA -The Philippine economy may grow in 2023 at a slightly slower pace than earlier forecast, now 5.6 percent from the 5.7 percent expected in March, as high interest rates may ease pent-up demand for goods and services, according to the OECD Development Center.
In an update of their economic outlook for Southeast Asia, China and India for 2023, the Japan-based think tank noted that such a dampening effect had been observed in the Philippines during the first quarter.
Strong pent-up demand propelled economic expansion in the first quarter of 2023, though the impact was limited by higher inflation and massive borrowing costs owing to aggressive monetary tightening by the central bank, the report said, referring to the Bangko Sentral ng Pilipinas (BSP).
These factors dragged down private consumption and investments in the following months, which led to a weakening of the economy in the second quarter, it added. This was further exacerbated by the contraction in government spending resulting in real GDP (gross domestic product) growth of 4.3 percent in the second quarter, the lowest in nearly 12 years.