Continued easing of quarantine restrictions is seen to result in a smaller growth contraction in the last quarter of this year and this is projected to pave the way for a positive output starting in the first quarter of 2021.
In a virtual briefing Thursday, Acting Socioeconomic Planning Secretary and National Economic Development Authority (NEDA) Director General Karl Kendrick Chua said the last quarter of the year is seasonally the biggest contributor of annual growth, as measured by gross domestic product (GDP), because of the Christmas holidays.
He said domestic output in the last quarter of the year is normally higher by 10 percent compared to the previous three quarters.
“With that, we see a gradual improvement quarter-on-quarter because of the relaxation of the quarantine measures. Next year, we will begin to see a strong positive recovery of around 6.5-.7.5 percent,” he said.
Chua said this projection means that “from a high negative growth or contraction since the second quarter (of this year) we will see the contraction getting smaller and hopefully being to see positive growth starting in the first quarter of 2021.”
“Our projections are based on the assumption, again, that the (Covid-19) vaccine will begin to be available and more widely available in the second half of 2021,” he said.
Growth print in the first quarter of this year is at -0.7 percent while it is at decades low of -16.9 percent in the second quarter. Third-quarter output stood at -11.5 percent.
GDP in the first nine months this year posted a 10 percent contraction because of the virus-induced pandemic.
Full-year contraction is seen to be around -8.5 to -9.5 percent this year but economic managers forecast recovery of between 6.5 to 7.5 percent next year and a higher 8-10 percent GDP for 2022.
Source: Philippines News agency