Tuesday, June 1, 2004

A pleasant surprise

It's a pleasant surprise that our economy grew more than expected. Analysts predicted a growth of above 4% but the economy actually grew by 6.2%. Government says the growth is fueled by increase in personal consumption expenditure brought by pre-election spending. Fine, understandable. Government-side spending for the election hasn't factored in yet in this growth. In fact, government spending growed slower in the first quarter. So it's not true that GMA spent a lot for the human billboards that disappeared right on the day after the election. The overly advertised government programs that GMA bandied about did not contribute significantly to this GDP growth, government says so. The government acknowledged, though, that the increase in government spending was for the printing of election paraphernalia and contractual services (and maybe the botched computerization). Moreover, centrifugal sugar exports grew by 60% this quarter. Last year, we actually filled our quota. With this growth in sugar export, we may have filled our quota this early. The traditional top export earners actually didn't post growth this time. Manufacturing is down. Our ability to sustain this growth(?) is doubtful.

The opposition says GMA spent a lot of government money for this election. The government, through its data, says it isn't so. Economic planners shoudn't be exactly happy with this growth. If government will not admit spending much during the first half of the year, it will be very hard to show that GDP will grow significantly by the 3rd quarter and by year-end. We have milked the data dry to show that GDP increased but not because of government spending.

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