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Pre-pandemic GDP level seen in Q3 2022

These latest forecasts suggest that the country’s real output will revert to its pre-pandemic level by the third quarter of 2022, if not sooner

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The domestic economy’s return to pre-pandemic level could happen in the third quarter 2022, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno said.

“The GDP (gross domestic product) prospects appear bright. With the adjusted second quarter GDP real growth of 12 percent, followed by a 7.1 percent growth in the third quarter, a 2021 full year growth of 5 to 6 percent is attainable,” Diokno told banking reporters in a Viber message on Sunday.

“These latest forecasts suggest that the country’s real output will revert to its pre-pandemic level by the third quarter of 2022, if not sooner,” he added.

According to him, the accelerated vaccine rollout and the lower Covid-19 cases makes the Development Budget Coordination Committee’s set 7 to 9 percent target in 2022 and 6 to 7 percent in 2023 doable.

Still, the BSP chief listed factors that could help bolster faster economic recovery, including the slower inflation in October and the expected higher labor force participation rate.

Diokno also noted the local unit could strengthen on the back of higher remittances from overseas Filipinos (OF) while real estate prices remain at a manageable level.

“There appears to be no pressure on rising real estate prices: increase in real property prices in National Capital Region are either flat or slightly down, though there is a slight increase in prices in few places outside NCR,” he said.

“The threat of peso depreciation is fading as the peso is expected to appreciate, with the prospect of stronger OF remittance inflows in the last few weeks of the year in time for the Christmas holidays,” he added.

As such, the BSP chief said these developments provide the central bank additional buffer to delay any recalibration in its monetary policy stance.

“This suggests that the BSP may continue to be patient and continue its accommodative monetary policy stance given the current domestic, external and financial developments,” Diokno said.

The BSP kept its near-record low policy rate of 2 percent since the Monetary Board’s meeting on 17 December 2020.

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