6% economic expansion possible in 2021 – Diokno

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Bangko Sentral ng Pilipinas Governor Benjamin Diokno said gross domestic product could rise 5% to 6% this year, based on economic output from the past two quarters. Growth would be a turnaround from last year’s 9.6% contraction at the start of the pandemic, the worst economic performance since World War II. “The outlook for GDP looks good. With real adjusted GDP growth of 12% in the second quarter, followed by growth of 7.1% in the third quarter, a full-year growth rate of 5-6% in 2021 is achievable, ”Diokno said in a press release this weekend. Diokno said that based on recent developments, including the acceleration of vaccine deployment and the ebb of COVID-19 cases, the Development Budget Coordination Committee’s GDP growth targets of 7-9% in 2022 and 6 to 7% in 2023 “seem feasible”. “These latest forecasts suggest that the country’s real production will return to its pre-pandemic level by the third quarter of 2022, if not sooner,” Diokno said. The economy grew 12% in the second quarter and 7.1% in the third quarter, bringing the average for the first three quarters to 4.9%. Diokno also cited the slowdown in inflation in October on stabilizing the prices of meat and fish with the availability of imported supply.

He said that with sufficient slack in the labor market and the higher participation rate expected as workers re-enter the labor market, there was little likelihood of an increase in wages as the vaccine rollout accelerated and consumer confidence increased as economic activity expanded. “This contrasts sharply with inflationary pressures in developed countries like the US, EU and UK due to supply chain bottlenecks and rising labor spending. work, ”he said. “There does not appear to be any pressure on the rise in house prices: the rise in house prices in the National Capital Region is either stable or slightly down, although there is a slight price increases in a few places outside the NCR, ”Diokno said. He said the threat of a peso depreciation was also fading, as the local currency was expected to appreciate, with the prospect of increased remittances in the final weeks of the year, in time for Christmas holidays. The BSP predicted that inflation would average 4.3% in 2021, 3.3% in 2022 and 3.2% in 2023. “This suggests that the BSP could continue to be patient and continue with its policy. accommodative monetary policy given current domestic, external and financial developments. “says Diokno.

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