In World Economy News 19/08/2016
The Philippine economy grew at a faster pace in the second quarter on government spending ahead of the general election.
Gross domestic product expanded 7 percent in the second quarter from a year ago, faster than the revised 6.8 percent growth in the first three months, the Philippine Statistics Authority said Thursday.
The economy expanded at the fastest pace in three years, while growth was forecast to ease to 6.6 percent.
On the production side, services output climbed 8.4 percent and the industry sector advanced 6.9 percent. On the other hand, agriculture output declined 2.1 percent.
Quarter-on-quarter, GDP growth improved to 1.8 percent from 1.3 percent in the first three months of the year.
In the first half of the year, GDP grew 6.9 percent from the same period of last year.
President Rodrigo Duterte has taken over a country in good shape, Gareth Leather at Capital Economics said. Although the foundations are in place for growth to remain strong, Duterte’s election has made the outlook more uncertain, the economist added.
Socioeconomic Planning Secretary Ernesto Pernia said the economy is likely to see slower growth as the first half growth was boosted by government spending ahead of the election. The government expects the economy to grow 7-8 percent this year.
The expenditure-side breakdown of GDP showed that household spending grew 7.3 percent in the second quarter.
Driven by the implementation of social programs, government spending logged a double-digit growth of 13.5 percent. Investment in fixed capital formation surged 27.2 percent.
Exports of goods increased only 4.1 percent and that of services gained 15.3 percent. At the same time, imports of goods moved up 22.9 percent and services imports rose 13.3 percent.
Source: RTT News
