2023 PH GDP Report: Yearly growth slows
The country’s 4th quarter 2023 growth may have exceeded consensus estimates, but not enough to reach the government’s target for the year.
The Philippines’ Gross Domestic Product (GDP) for the 4th quarter expanded at a moderate pace of 5.6% year-on-year versus last quarter’s 6.0% growth. This brings the full-year 2023 GDP average to 5.6% (versus the 5.5% Metrobank Research forecast). The latest quarterly GDP print also came out higher than the 5.2% Bloomberg consensus estimate, driven by the recovery in investment spending and surprisingly strong consumer spending.
On a nominal basis, consumer spending appears to be picking up despite high inflation, while both investment spending and imports have picked up as well, indicating that business activity appears to be stirring up already. However, tailwinds will continue to beset the local economy due to the El Nino weather phenomenon and emerging geopolitical conflicts. Some upside is expected as the BSP may cut rates in the second half of the year on the back of lower inflation expectations, giving room for more domestic business activity.
We are retaining our 2024 full-year average GDP forecast at 6.0% on the back of decelerating inflation and interest rate cuts. National Economic Development Authority (NEDA) Secretary Arsenio Balisacan also cited liberalization reforms that will attract more foreign investments and improve the quality of employment. Meanwhile, fiscal consolidation is also expected to speed up the implementation of government programs, while prioritizing tax collection efficiency.
Please see the report below for more details on the latest GDP release and our outlook.
2023 PH GDP Report: Growth settles below government target
Growth has slowed in 2023 but we are maintaining our forecast of 6% GDP growth in 2024.Download