Gov’t sticking with target despite slower Q1 GDP growth —Recto

The Marcos administration is determined to hit the lower end of its economic growth target for 2024 despite the slower gross domestic product (GDP) performance in the first quarter, according to the government’s chief economic manager.

In a chance interview with reporters, Finance Secretary Ralph Recto said that the 5.7% GDP growth rate in the January to March period is still “a good growth rate.”

The economy’s 5.7% growth in the first quarter was slower than the 6.4% growth rate seen in the same period last year. 

The latest reading is lower than the target range of 6.0% to 7.0% set by the inter-agency Development Budget Coordination Committee (DBCC), which was cut short from the prior goal of 6.5% to 7.5% to reflect factors such as global demand, trade growth, oil prices, and inflation trends.

Recto, nevertheless, said the Philippines’ first quarter GDP growth is “still one of the highest.”

With this, the Finance chief said the government is "sticking to the target."

“I still think we can hit 6% before the end of the year because inflation is slowing down also,” he said.

“And we expect rising prices to start slowing down, too,” he added.

The administration's chief economic manager added that policy rates are likely to be slashed in the latter part of the year amid expected slower inflation.

“I expect, moving forward, I expect rates to go lower… but it's possible that within the end of the year, there could be a possible reduction in rates,” Recto said.

The central bank raised key policy rates by 450 basis points since May 2022 in a bid to tame inflation, which averaged 6.0% in 2023, higher than the target range of 2.0% to 4.0%. —VAL, GMA Integrated News