NEDA chief: RP can still meet 2008 growth target
The National Economic Development Authority (NEDA) remains confident that the country’s growth projections will be met this year, despite a global economic slowdown and high commodity prices.
The government initially expected economic growth, as measured by gross domestic product, to come in between 5.7-6.5% this year. To attain this, NEDA Director General Augusto Santos said, the government was prepared to forego its plan to balance the budget this year, to prop up spending to the tune of P75 billion on projects such as infrastructure and social services.
But because of the unabated rise in commodity prices, Santos said the government may have to revisit its goals for the year in September, and revise targets to factor in effects of the global downturn.
Finance Secretary Margarito Teves earlier announced that the government was revising its growth projections for the year, widening its target to 5.7-6.6%, as it expects the global downturn to hit the economy hard in the second half before tapering off next year.
Santos added that the government is also looking at revising inflation targets from 3-5% to 7-9% for 2008, factoring in the transport fare hike to be implemented on Friday this week.
He explained that transport costs constitute second-round effects to inflation, such that every 1% increase in transport fares translates to a 0.017% increase in inflation. The current P7.50 to P10.00 fare hike for jeepneys, for example, already constitutes a 10% increase.
“But we are hoping that inflation will taper off towards the latter part of the year, as oil price movement is expected to slow towards the fourth quarter,” said Santos.
Santos said that the government has so far never missed its targets, and at the very least, has always been able to hit the lower end of its target range.
Source: ABS-CBN News Online, http://www.abs-cbnnews.com/storypage.aspx?StoryId=124637, July 10, 2008