Consumer spending likely to inch up as restrictions ease

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Photo from BusinessWorld

By BusinessWorld

The potential effects of looser Metro Manila mobility restrictions on consumer spending and this year’s economic growth have drawn mixed levels of optimism from economists and industry heads.

They are turning to the results of eased coronavirus disease 2019 (COVID-19) restrictions from countries with high vaccination rates to call for a faster inoculation rollout and expanded testing.

Cid L. Terosa, a senior economist at University of Asia and the Pacific School of Economics, said the new alert level will boost consumer spending because it removes mobility and transactional constraints brought about by stricter restrictions in the past. The improvement could help bring the economy towards the high end of the government’s lowered 4-5% target for the year.

“It may not move GDP beyond 5%, but it will definitely make it more possible to achieve at least 5% GDP (gross domestic product),” he said in an e-mail. “The economy needs to grow by at least 6% though to get the economy back on track towards the end of 2022.”

More business activity has been allowed in Metro Manila after it was placed on Alert Level 3 from Oct. 16 to 31.

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