MANILA, Philippines – The Institute of Chartered Accountants in England and Wales (ICAEW) expects the economy growing by only 5.3 percent this year amid weak demand from China.
“Strong growth in consumption and government spending in the Philippines will drive output up by 5.3 percent in 2013,” ICAEW said in a report.
“While this is down on 2012, when GDP grew by 6.8 percent, it is 0.6 percentage points higher than average annual growth over the previous five years,” ICAEW said.
This sharp deceleration from year-ago levels means slower growth for the second half of the year as the Philippine economy already grew by 7.6 percent in the first half.
Moreover, this is below the government’s full-year economic growth target of six to seven percent this year.
This expectation came as ICAEW expects growth in the Association of Southeast Asian Nations to slow down to 4.7 percent this year from 5.5 percent in 2012.
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“This slowdown will be largely driven by easing demand from China while a squeeze on the availability of capital in 2014 and 2015 as US monetary policy is tightened will also hold back growth,” ICAEW said.
ICAEW expects China’s growth to slow down to 7.2 percent this year, from an average of 10.5 percent in the last 10 years due to a drop in demand for Chinese exports.
ICAEW also expects the economy to grow by 5.4 percent in 2014 before falling to 4.6 percent in 2015.