MANILA, Aug 10 (Reuters) – The Philippine economy slowed for a third consecutive year in April and June from a year earlier, the statistics agency said on Thursday, on the back of higher commodity prices and slower government and consumer spending.
Gross domestic product (GDP) rose by 4.3% in the June quarter and thus lost further momentum after having been weaker at 6.4% in the previous quarter than in the December quarter at 7.1%.
On a quarterly basis, the economy contracted 0.9% in the second quarter, weaker than the 1.1% expansion in the March quarter and missing economists’ growth forecast of 0.5%.
The country’s economy ministers said the weaker performance was due to higher prices for agricultural products, which deterred consumer spending, and a fall in government spending compared to the same period last year when an election was held.
“In the second quarter, moderate economic growth was driven by increases in tourism spending and commercial investment, but was dampened by high commodity prices, the lagged impact of interest rate hikes, the slowdown in government spending and slower global economic growth,” they said in a statement.
Slower-than-expected growth in the second quarter will weigh on the central bank’s monetary policy review, which will meet on August 17 to decide whether to resume raising interest rates or extend its hiatus.
Ministers said an improvement in the inflation outlook bodes well for a rate cut and that government spending would pick up in the coming quarters and wanted to ensure broader price stability despite upside risks.
Reporting by Neil Jerome Morales and Enrico dela Cruz; Edited by Martin Petty
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