ASIAN countries including the Philippines will likely pose slower economic growth in the fourth quarter of 2023, according to a UK-based think tank.
“After Q3 data mainly brought upside surprises in Asia, our activity trackers suggest Q4 data could bring the reverse—more downside growth surprises,” Oxford Economics said on Tuesday.
For the Philippines, the UK-based think tank said its economy could “also surprise the consensus to the downside, with a low growth rate by historical standards.”
Based on its trackers, Oxford Economics said the country’s gross domestic product (GDP) growth may slow to 4.5 percent growth in the fourth quarter of 2023, 0.5 percentage points lower than the 5 percent consensus forecasts.
Across countries in Asia, the UK-based think tank said softness is “most apparent” in consumer spending-related indicators.
“That continues a turn in the trend of consumers losing their gusto that started in Q3. We suspect that will persist in the coming quarters, with the lagged impact of tighter monetary policy still feeding through, fiscal policy being tightened, and household balance sheets in need of some repair,” it noted.
The Philippines’s economic growth posted a growth of 5.9 percent in the July to September period or third quarter in 2023, according to the Philippine Statistics Authority (PSA).
With this, the country’s growth averaged 5.5 percent, just 0.5 percentage points shy from the low-end of the government’s full year target.
The national government, through the Development Budget Coordination Committee (DBCC) is targeting a growth of 6 to 7 percent in 2023.
According to Oxford Economics, data for the quarters leading up to the third quarter of 2023 showed a “clear trend” across the region. It noted that exports were “slumping” as global goods demand “fell back,” but the domestic consumer was helping to pick up the slack, as pent-up demand was still being satisfied after a long pandemic.
“But Q3 data indicated a notable reverse in the trend, with consumer spending growth generally softening but exports performing much better than they had in over a year. Growth was also helped in a few places by spikes in government spending. GDP mostly surprised to the upside,” the think tank said.
For the Philippines, PSA said that on the demand side, household final consumption expenditure (HFCE) grew by 5 percent in the third quarter of 2023. This is the slowest growth since the first quarter of 2021 when HFCE contracted 4.8 percent.
Similarly, Government final consumption expenditure (GFCE), and Exports of goods and services posted growths of 6.7 percent and 2.6 percent, respectively. (Full story here: https://businessmirror.com.ph/2023/11/09/gdp-up-5-9-in-q3/#:~:text=The%20country’s%20economic%20growth%20posted,the%20government’s%20full%20year%20target.)
The UK-based think tank pointed out that China is deemed as the “one big exception” in the trend across countries in Asia. “Our tracker points to growth of over 7 percent in Q4, compared to 4.9 percent in Q3, though, the underlying data are decidedly mixed. Manufacturing is a key source of strength.”
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