Post-Yolanda reconstruction to spur economic growth in 2014 – study

Reconstruction in the wake of Typhoon Yolanda could spur growth in the first quarter of 2014

that will likely bring robust growth in the Philippine economy, a division of Citigroup Global Markets said in a study published over the weekend.

 

“The devastation wrought by typhoon Yolanda may slow the fourth-quarter 2013 GDP growth, but the rebuilding efforts could prompt a sharp recovery in the first quarter of 2014. Hence, our 2014 GDP growth forecast of 7.3 percent,” Citi Research said in its Pan-Asia Road Ahead: 2014 Outlook.

 

Aside from reconstruction, Citi Research said more spending and gradually rising rates will likely be "key drivers of the market."

 

The National Statistical and Coordination Board earlier said economic growth slowed to 7 percent in the third quarter of 2013 from 7.5 percent in the second.

That brought GDP in the first nine months of the year to 7.4 percent, which was still higher against  6.7 percent in the first three quarters of 2012.

 

Citi Research said, though, that inflation must “stay within an acceptable range of 4 percent to 5 percent; hence we expect a gradual 50 basis points policy rate hike in the second half of 2014.”

 

Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr., in a text message to reporters, said inflation "could inch up in the coming months" in the aftermath of the typhoon that caused widespread damage in the Visayas and parts of Luzon in November. 

 

"Nevertheless, as experience in past natural calamities have taught us, we do not see these effects persisting," he also said.

 

The BSP has raised its inflation target for 2014 to 4.5 percent from the earlier 3.9 percent in anticipation of the impact that Typhoon Yolanda will have on the economy. — JDS, GMA News