Wednesday, 7 September 2011

Govt dragging economy down

NEDA may revise target after poor Q2 showing
 Joyce Pangco Pañares
Manila Standard

THE National Economic and Development Authority will review the country’s target of 7 percent to 8 percent growth for the full year following the sharp decline in the gross domestic product in the second quarter, a Palace official said Tuesday.

“The Neda is reviewing the fighting target because of the second quarter growth, [but] the Department of Budget and Management used a 5 percent to 6 percent growth target for our assumptions this year,” Communications Secretary Ramon Carandang said.

“That is still a doable target.”

Carandang said the government started pump-priming the economy in July to boost growth.

Private economists have traced the slow economic growth in the first half to weak public spending.

The gross domestic product, or the total value of the goods and services produced, grew only 3.4 percent in the second quarter, down from 8.9 percent a year ago and lower than the government’s forecast of 4.5 percent to 5.5 percent.

The latest growth data brought the expansion in the first half to 4 percent compared with the 8.7-percent growth a year ago.

Economist Benjamin Diokno said the government had been a drag to the economy instead of being a source of growth.

Public construction continues to plunge: from negative 24 percent in the third quarter of 2010 to negative 37.3 in the first quarter of 2011, and now to an unprecedented negative 51.2 percent in the second quarter of 2011,” he said.

“The message for the government is clear: It has to act more decisively and move government programs and projects faster.”

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