The country’s gross domestic product (GDP) is expected to grow by 2.5 percent in the third quarter and further accelerating to 4.5 percent in the last quarter of 2009, according to the latest forecast by First Metro Investment Corp. and University of Asia & the Pacific in its August issue of the “Market Call.”

“The relatively strong numbers in June and July confirm our expectation of clearly positive GDP growth figures for the second semester,” the report said.

Market Call noted that inflation remains muted, as other prices other than petroleum products, have been quite stable in the last three months.

“The only remaining risk is for a severe El Niño to hamper rice harvest in October-November, as crude oil prices are unlikely to make a strong upward move until mid-2010.”

The report also expects an improvement in tax take as the economy turns more positive in the second semester, and fiscal discipline will enable the national government to meet its P250 billion deficit target.

Exports are also likely to post positive growth in Q4, due to base effects and consistently rising monthly exports as East Asia especially China and the US recoveries gain traction. (EHL)