Economy barely escaped contraction, says Neda

The government said the economy is expected to report a growth of between 0.7 percent to one percent for the whole of last year after an expansion in the fourth quarter of between 0.6 percent to 1.6 percent, acting National Economic and Development Authority (Neda) director general Augusto Santos said yesterday.

The fourth quarter performance was somewhat affected by a slowdown in output in the agriculture sector as a result of natural disasters that hit the country and a slump in the performance of the manufacturing sector as a result of the global recession.

Santos said the growth estimate for the year still stands at 2.6 percent to 3.6 percent but he added economic managers have to meet when the actual performance figures for last year are released on Thursday.

Farm production shrank 2.4 percent in October to December from a year earlier after strong typhoons ravaged crops, the agriculture department said last week.

“For 2010, we will not really be abandoning the stimulus package. We will continue with stimulus spending although at a reduced scale compared to 2009,” he said.

The stimulus spending notwithstanding, inflation this year should stay within the central bank’s target of 3.5 percent to 5.5 percent, Santos said.

Inflation averaged 3.2 percent in 2009. –Aytch de la Cruz, Daily Tribune