Reconstruction in areas devastated by Typhoon Yolanda is expected to fuel economic expansion this year
MANILA – The Philippine economy again will grow faster than its neighbors but is unlikely to meet its target in 2014, according to the United Nations.
In its World Economic Situation and Prospects 2014 report, the UN said the country’s gross domestic product (GDP) is projected to grow 6.2 percent this year, lower than the government target of between 6.5-7 percent.
In the first three quarters of 2013, Philippine GDP grew 7.4 percent, above the full-year target of 6-7 percent. GDP is the amount of final goods and services produced in the country and as such measures economic performance.
Full-year forecasts have since been tempered following a super typhoon that devastated the central part of the Philippines.
“The macroeconomic impact was, however, relatively limited, with only a mild reduction in the full-year growth rate for 2013 and reconstruction activities possibly adding to growth in 2014,” UN said of Typhoon ‘Haiyan’ (local name: Yolanda).
The UN said the Philippine economy likely grew 6.7 percent or within the government target last year.
For this year, the UN’s growth forecast for the Philippines is higher than that for Indonesia (5.6 percent), Malaysia (4.8 percent), Singapore (3.7 percent), Thailand (4.2 percent), and Vietnam (5.7 percent).
In 2015, the Philippine economy is projected to grow 6.3 percent.
“Our forecast is made in the context of many uncertainties and risks coming from possible policy missteps as well as non-economic factors that could stymie growth,” Shamshad Akhtar, UN assistant secretary-general for economic development, said.
The UN report added that inflation will remain tame worldwide, but the employment situation will continue to be “challenging.”
In the Philippines, the unemployment rate rose to 7.3 percent in July as the economy failed to create sufficient full-time jobs to accommodate the growing labor force.
“While growth in international trade flows is expected to pick up moderately to 4.7 percent in 2014, the prices of most primary commodities are projected to be flat, although any unexpected supply-side shocks, including geo-political tensions, could push some of these prices higher,” the UN said. –Darwin G. Amojelar, InterAksyon.com
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