Fitch Solutions sees the Philippine economy growing by more than 7 percent this year, which will fueled by household consumption and gross capital formation or investments by businesses in fixed assets and inventory.
International credit rater Fitch Solutions released a report on Friday saying it continues to see a 7.6-percent gross domestic product (GDP) expansion this year, which slightly exceeds the government’s best projection of 7.5 percent.
“Household consumption remains key to the growth rebound, with a recovery in gross capital formation dependent on stronger domestic demand,” it explained.
Gross capital formation are investments made by businesses for the production of goods and delivery of services, which include inventory, building, equipment, machines and vehicles, among others.
Fitch Solutions sees private consumption and gross capital formation rising by 5.5 percent and 25.1 percent this year, respectively. In 2020, household consumption contracted by 7.9 percent and gross capital formation by and 35.4 percent.
Also, Fitch Solutions said the recovery of remittance flows, improving household sentiment and the government’s reluctance to return to the stricter lockdowns are some of the positive factors that will support private consumption this year.Investments are also expected to expand, Fitch Solutions said, but said this may only materialize at the latter part of the current year. SOVEREIGNPH