Economists air prescriptions to boost economy

Economists air prescriptions to boost economy

by UA&P News Desk on November 24, 2011 - 5:25 pm

From BusinessWorld

THE GOVERNMENT should focus on domestic growth and boosting employment next year amid renewed global volatility, economists from the University of Asia & the Pacific (UA&P) yesterday said.

 Given underspending’s drag on 2011 growth, they added, the Aquino administration would do well to increase disbursements and tap resources within reach to keep the economy afloat.

“The global economy will be very adverse and it will take at least five years before we see the light,’ UA&P economist Bernardo M. Villegas said.

“We have to depend a lot on our domestic consumption and investment,” he added.

Fellow economist Emilio T. Antonio, Jr. claimed that tight fiscal and monetary policies had also held back growth. “The government’s concern for stability in prices is valid but it must be balanced with the need for growth in domestic production activities and employment,” he said.

The economy grew by just 4% in the first half of 2011, held back by weak exports and government underspending. Economic managers have abandoned the 7-8% growth goal for this year, adopting the lower 5-6% assumption used for budgetary purposes and forecasting actual expansion of 4.5-5.5%.

Officials have vowed to address the underspending issue and last month the government announced a P72.11-billion “stimulus”.

“We are likely to achieve 4.6% GDP growth this year and 6% thereafter,” UA&P economist Victor A. Abola said.

“GDP growth will remain robust due to added public spending plus strong private sector,” he added, with agriculture, mining and industry leading the way.

UA&P economist Peter Lee U, for his part, said: “It will be okay next year if we see remittances maintain its 5-7% growth.” #

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