DOF Economic Bulletin on 2019 Q3 Economic Performance
· The economy grew by 6.2% in the second quarter of 2019, higher than the 6.0% growth in the same quarter of the previous year. This brings growth for the first three quarters of 2019 to 5.8%.
· Growth was consumption-led, buoyed by the steep drop in inflation. Consumption grew by 5.9% in the third quarter, higher than the 5.3% growth registered in the same quarter of the previous year. There are also signs that government spending and public investment are picking up.
· Investment remained timid, despite the recovery of public construction and lower interest rates, as the uncertainties in the world economy and robust expansion in previous years dampened expansion of factory capacities during the quarter.
Public construction, in particular, grew by 11% in the third quarter, reversing the slump in the preceding second quarter.
Growth in private sector construction, meanwhile, nearly doubled from 10.4% in the third quarter of 2018 to 19.1% in the same period of 2019.
· From the supply side of the economy, the services sector maintained its growth of 6.9%. The double digit growth in construction tempered the deceleration in manufacturing activities. More favorable weather conditions, meanwhile, resulted in agriculture growing by 3.1% in the third quarter.
DOF View
· Fiscal policy will continue to be a pillar for high, sustainable, and inclusive growth. In the first three quarters of the year tax effort topped 15.7%, already approaching the 15.8% water mark clocked in 1997.
· With ample resources to mobilize, agencies should nevertheless continue working with Congress for the timely passage of the 2020 budget.
Table 1 Quarterly and Semestral Growth and Contribution to Growth
Growth (%) Contribution to Growth (ppts)
Quarterly Q1-Q3 Quarterly Q1-Q3
Expenditure 2018Q3 2019Q2 2019Q3 2017 2018 2019 2018Q3 2019Q2 2019Q3 2017 2018 2019
Household Consumption 5.3 5.5 5.9 5.8 5.7 5.8 3.6 3.6 3.9 3.9 3.8 3.9 Government Consumption 14.3 7.3 9.6 4.7 13.1 8.0 1.5 0.9 1.1 0.5 1.4 0.9 Capital Formation/Investment 19.6 (8.5) (2.1) 9.5 16.5 (0.8) 5.6 (2.5) (0.7) 2.6 4.7
(0.3) Fixed Capital 16.6 (4.6) 2.1 9.4 14.6 1.3 4.8 (1.3) 0.7 2.6 4.1 0.4 Construction 13.3 2.8 17.3 5.5 12.1 8.8 1.3 0.3 1.8 0.5 1.2 0.9
Page 2 of 3 Public Construction 25.2 (27.2) 11.0 9.5 22.3
(13.6) 0.5 (1.2) 0.2 0.2 0.6 (0.4) Private Construction 10.4 23.4 19.1 4.1 8.4 17.7 0.8 1.5 1.6 0.3 0.6 1.3 Durable Equipment 18.5 (12.8) (9.1) 10.5 16.3 (5.0) 3.1 (2.0) (1.7) 1.7 2.7
(0.9) Exports 14.2 4.8 0.2 19.3 13.2 3.4 9.4 2.9 0.1 10.5 8.0 2.2 Imports 19.1 (0.1) (0.0) 18.1 17.1 2.7 (13.7) 0.1 0.0
(11.0)
(11.6) (2.0) GDP 6.0 5.5 6.2 6.7 6.2 5.8 6.0 5.5 6.2 6.7 6.2 5.8
Net Income from Abroad 5.2 2.3 2.9 6.9 4.9 2.8
GNI 5.9 5.0 5.6 6.7 6.0 5.3
Sector
Agriculture (0.0) 0.8 3.1 4.6 0.5 1.5 (0.0) 0.1 0.2 0.4 0.0 0.1 Industry 6.0 3.7 5.6 7.0 6.7 4.7 2.0 1.3 1.9 2.4 2.3 1.6 Mining & Quarrying (1.3) 14.6 (4.9) 0.5 (0.6) 6.6 (0.0) 0.2 (0.0) 0.0 (0.0) 0.1 Manufacturing 3.8 3.9 2.4 8.5 5.6 3.7 0.9 0.9 0.5 1.9 1.3 0.9 Construction 15.2 (0.5) 16.3 5.1 13.0 6.9 1.0 (0.0) 1.1 0.3 0.8 0.5 Electricity, Gas & Water Supply 5.0 7.8 7.2 2.8 5.1 6.2 0.2 0.2 0.3 0.1 0.2 0.2 Services 6.9 7.1 6.9 6.8 6.8 6.9 4.0 4.2 4.1 4.0 3.9 4.1 Transportation 5.4 5.9 9.1 3.7 6.0 7.4 0.4 0.4 0.6 0.3 0.4 0.5 Trade 5.1 8.4 8.1 6.8 5.7 7.9 0.9 1.3 1.5 1.1 1.0 1.3 Financial Intermediation 7.2 9.2 10.0 8.4 7.5 9.8 0.5 0.7 0.7 0.6 0.6 0.7 R. Estate, Renting & Bus. Activities 5.7 3.8 4.2 7.7 5.0 3.9 0.7 0.4 0.5 0.9 0.6 0.5 Public Administration 17.8 8.6 5.3 8.4 15.4 7.8 0.7 0.4 0.2 0.3 0.6 0.3 Other Services 7.9 7.7 5.1 6.4 7.2 6.1 0.8 0.8 0.5 0.7 0.8 0.7 GDP 6.0 5.5 6.2 6.7 6.2 5.8 6.0 5.5 6.2 6.7 6.2 5.8
Source of Basic Data: PSA
Note: Contribution to growth may not add to total growth due to statistical discrepancy
Table 2 Selected Fiscal Indicators (in % of GDP) for the First Three Quarters of the Year
2017 2018 2019
Revenues 15.9 16.9 17.5
Tax Revenues 14.5 15.2 15.7
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