Japanese investment bank Nomura has again raised its gross domestic product (GDP) outlook for the Philippines this year to 6.4 percent on expectations that the economy will sustain higher-than-expected growth in the first half of 2007.
Nomura’s previous forecast was 6.1 percent but in its latest Quarterly Asia Pacific — Economic Outlook, the investment bank said it was necessary to raise the 2007 economic growth outlook to 6.4 percent to capture the strong GDP growth in the second quarter of the year.
The National Economic and Development Authority (NEDA) has reported that domestic economy as measured by GDP grew by 7.1 percent in the first three quarters of the year after expanding by 7.3 percent in the first quarter, 7.5 percent in the second quarter and 6.6 percent in the third quarter of the year.
“We have raised our 2007 real GDP growth forecast to 6.4 percent from 6.1 percent, following higher than anticipated second quarter growth of 7.5 percent year-on-year,” Nomura said in its report.
Nomura has upgraded its Philippine GDP forecast for the third time now after adjusting it upwards from the original 5.2 percent to 5.4 percent and then to 6.1 percent.
The investment bank is optimistic that the government is likely to grow by 6.4 percent this year despite the expected gradual slowdown in GDP growth in the second half of the year.
The government, for its part, expects the economy to expand by anywhere between 6.1 percent and 6.7 percent this year from 5.4 percent last year.
For next year, Nomura sees the country’s GDP expanding by 5.7 percent and by 5.8 percent in 2009.
“Slowing US economy makes for an increasingly uncertain export environment,” Nomura added.
However, the Japanese investment bank said government spending for infrastructure would help boost economic growth.
“We think the local economy will maintain stable growth in 2008 and 2009, driven by domestic demand, particularly from public-sector infrastructure investment,” Nomura said.
On the inflation side, Normura sees inflation averaging 2.9 percent this year from 6.3 percent last year.