Household consumption is not likely to sustain its growth in 2023 amid rising inflation and signs of further policy tightening by the Bangko Sentral ng Pilipinas (BSP), analysts said. READ:
“The overly aggressive tightening of the BSP this year is a big headwind for growth in 2023. We also continue to believe that the resilience in consumption this year will eventually buckle, as there’s been little progress towards the rebuild in household savings post-pandemic,” Pantheon Chief Emerging Asia Economist Miguel Chanco said in an e-mail.
The Philippine Statistics Authority reported that household consumption rose 8% year on year, accelerating from 7.1% a year earlier. Quarter on quarter, household final consumption grew by 5.7%. Mr. Mapa said according to a BSP study, consumers initially dipped into savings to fund the recent pickup in expenditure but have since diverted funds to rebuild decimated savings, citing a BSP study.
John Paolo R. Rivera, an economist at the Asian Institute of Management, said that inflation and the weakening of the peso could lead to further losses in purchasing power. In the first 11 months of the year, inflation averaged 5.6%, against the 4% posted a year earlier. The average was still below the BSP’s full-year forecast of 5.8%.
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