Inflation poses challenge to 2024 growth prospects

High inflation was one of the pressing challenges the Philippines faced this year as it affected consumption, which serves as a key driver of economic growth.

- LOUELLA DESIDERIO

While inflation has eased and the government is holding on to the view that the growth target can be achieved for this year, elevated inflation is expected to still pose a challenge to the country's economic performance next year with the onset of El Niño.

As such, the government is being urged to continue measures to address inflationary pressures and mitigate the impact of high prices on consumption.

The country started 2023 with the headline inflation rate hitting a 14-year high of 8.7 percent in January, driven mainly by food price increases.

National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan said the country faced many challenges throughout the year such as inadequate imports to cover domestic demand; high prices of farm inputs; crops destroyed due to typhoons; animal diseases, as well as logistical bottlenecks and competition issues along the food supply chain.

As part of efforts to address inflation as well as ensure food and energy security, an executive order issued in May created the Inter-Agency Committee on Inflation and Market Outlook, which serves as an advisory body on measures to keep inflation within government target.

Even as inflation has slowed and is now closer to the two to four percent target, Balisacan said the government cannot be complacent.