Private sector economists expect inflation to peak at 6.7 percent by September or October, which may dampen the economic prospects in the second half.
Economists of First Metro Investment Corp. and the University of Asia and the Pacific said in the September issue of the Market Call report that the gross domestic product could grow by 6.5 percent in the fourth quarter.
“The inflation outlook, however, may put a damper in H2 [second-half] outlook, as it will likely remain above 6.5 percent in Q4 as the mild dip of -0.1 percent in August to 6.3 percent year-on-year from 6.4 percent in July,” they said.
“The second-round domestic effects of the sharp surge of crude oil prices in the first half have not completely played out. Besides, food inflation in the US and other advanced countries remains stubbornly high due to droughts and other supply issues,” they said.
The economy expanded by 7.8 percent in the first half, following the 8.2-percent growth in the first quarter and 7.4 percent in the second quarter.
