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The economic growth goal for the Philippines will probably be met this year.

Despite the repercussions of El Nino, an economist predicted on Friday that the government’s objective of 6 to 7 percent economic growth will likely be achieved this year.

According to Michael Ricafort, chief economist at Rizal Commercial Banking Corporation, an increase in the GDP of 6 to 7 percent is feasible given the year-over-year inflation rate’s recent decline, which may assist in lessening the negative impact of increased prices on economic growth.

As the economy continues to open up toward greater normalcy without more lockdowns as a policy goal, the Fed (US Federal Reserve) and local policy rates could also be decreased later this year and into 2024, he said.

Inflation rose to a maximum of 8.7% in January. However, it has slowed down and reached 6.6 percent in April.

El Nino could negatively affect agricultural output and pricing later this year and into 2024, but it won’t significantly slow GDP growth, according to Ricafort.

“[Philippine] economic growth [is] expected to be among the fastest-growing in the region and among major economies around the world amid favorable demographics of the country with more than 110 million Filipinos, the majority of whom are already of working age, (and) young average age of fewer than 25 years old, all of which would support GDP growth of at least 6%-7% in the coming years,” he said.

According to him, other potential growth drivers include higher consumer spending brought on by lower individual income tax rates, high remittances from overseas Filipino workers, further increases in government spending, the expansion of business process outsourcing, and a pick-up in international travel.

The Philippines expanded the quickest among the region’s main emerging economies in the first quarter of 2023, according to data from the National Economic and Development Authority, with a rate of 6.4%, followed by Indonesia (5%), China (4.5%), and Vietnam (3.3%).

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