The Philippine economy grew more than expected in the third quarter on robust household spending and investment, data from the Philippine Statistics Authority revealed on Tuesday.

Gross domestic product grew 7.1 percent on a yearly basis in the third quarter, faster than the expected growth of 4.8 percent. But the pace of growth slowed from the 12.0 percent expansion registered in the second quarter.

On a quarterly basis, GDP was up 3.8 percent, which was also bigger than the expected rate of 1.2 percent.

The government targets to achieve 4-5 percent growth target the full year of 2021.

On the demand side, household consumption grew 7.1 percent and government spending gained 13.6 percent annually in the third quarter. Gross fixed capital formation logged a sharp growth of 22 percent.

At the same time, exports and imports rose 9.0 percent and 13.2 percent, respectively.

Among the major economic sectors, industry and services posted positive growth of 7.9 percent and 8.2 percent, respectively. Meanwhile, agriculture, forestry, and fishing posted a contraction of 1.7 percent.

GDP figures were much stronger than expected and output is set to jump again in the fourth quarter following a sharp drop in virus cases and the further easing of restrictions, Alex Holmes, an economist at Capital Economics, said.

That said, even after rapid growth in the second half of this year, the recovery will still have a long way to go, and the economy will remain in catch-up mode throughout 2022, the economist added.

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