MANILA — Japanese financial firm Nomura maintains its 6.7-percent growth forecast for the Philippine economy this 2017 on back of better fiscal support and capital spending.
In a report titled Global Markets Research dated August 17, 2017, Nomura said the 6.5 percent growth, as measured by gross domestic product (GDP), in the second quarter of the year was in line with its forecast for the period but beat the 6.4 percent market consensus.
Growth in the second quarter was driven by the industry sector, which posted the highest growth at 7.3 percent, followed by agriculture at 6.3 percent, which was a turnaround from the two percent drop during the same period in 2016.
On the other hand, services decelerated after growth stood at 6.1 percent from year-ago’s 8.2 percent.
Growth in the second quarter this year brought the first half’s output to 6.4 percent, near the lower end of the government’s GDP target for the year.
Nomura said a 6.9-percent growth in the second half of the year was needed to achieve a 6.7 percent full year output.
It expects the second half’s performance to be driven by “more fiscal support to growth, particularly from an increase in capital spending.
“More progress on infrastructure spending should also continue to crowd in private investment, while we expect household consumption to remain resilient,” it said.
Relatively, DBS Bank, in a research study, said the financial institution is keeping its 6.4 percent growth forecast for the year.
It explained that “inventory drawdown has continued, and this indicates the normalization in investment numbers is likely to remain a dominant theme ahead.”
“Certainly, however, upward risks remain,” it said.
“We are encouraged by the strong showing in both agriculture and manufacturing sectors. The manufacturing sector has continued to receive a boost from export demand, and this has proven to be a constant positive in recent years,” it added.