Jonatha​n L. Ravelas

Living in these interesting times 

There are several variations on the exact wording, mostly attributed to British statesmen. Joseph Chamberlain, in a speech to Parliament in 1898, said: “I think that you will all agree that we are living in most interesting times.” 


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Indeed, we are living in interesting times. Living through and getting out of the COVID-19 pandemic amid a Russia-Ukraine conflict and increasing tensions between the US and China over Taiwan. If this is not challenge enough, let’s add the “sticky” global inflation and global monetary tightening to the pot. So, how will this affect our economy and the markets? Looking at the latest data, the economy grew at a softer pace at 6.40 percent in Q1 2023. The moderation was driven by plunging exports amid the global economic downturn and the slump in the global tech sector as well as softer private spending growth due to the higher inflation and interest rates. That said, stronger expansion in fixed investment and public spending prevented a larger deterioration in GDP growth. In Q2, economic activity is likely similar to Q1 2023. In May, the manufacturing sector PMI improved from an eight month-low due to the slight easing of inflation and interest rates. In 2023, GDP growth should ease to 6.00 percent and in 2024, 5.8 percent due to softening domestic demand amid higher interest rates and sticky inflation. That said, the economy remains one of the strongest in ASEAN, boosted by China’s reopening, higher remittances and public infrastructure projects. A fragile global economy and lagging structural reforms cloud the outlook, however.