MANILA – Domestic growth in the last quarter of 2020 is expected to improve as the economy continues to re-open but share of consumer spending is seen to remain weak due to less expenditures on non-essentials.
In a virtual briefing Wednesday, National Economic and Development Authority (NEDA) Undersecretary Rosemarie Edillon said consumer spending in the third quarter remains down compared to last year partly because of job losses and less spending on non-essentials and entertainment, among others.
She said the fourth quarter “will still be challenging because we still want people to practice social distancing”. She noted that expenditures for eating out are seen to rise as restaurants are now allowed to increase the number of customers within their premises at a given time.
Growth, as measured by gross domestic product (GDP), posted a smaller contraction of -11.5 percent in the third quarter from -16.9 percent in the previous quarter.
Economic managers forecast full-year contraction to be around 5.5 percent.
Edillon said any changes on this forecast will be announced in the coming days as economic managers are expected to meet as early as next week to discuss the latest economic developments.
Amidst the negative growth prints in the last three quarters, she said “the economy is on the mend”.
“We’ve seen the worst and we’re starting to recover. The most effective strategy to do this is to re-open the economy,” she said.
For next year, she said economic managers are optimistic for the projected 6.5-7.5 percent rebound of GDP even as the Covid-19 vaccine is expected to be available towards the end of 2021.
“But we’re hoping that prior to that we would really be used to complying to this minimum health standards and really manage this Covid-19 so that we could go about our work,” she said, adding that availability of the vaccine would really boost consumer confidence. (PNA)