Fourth quarter growth beats expectations !!

The Wall Street Journal reported last Friday that the economy grew faster than expected in the fourth quarter, helping to buoy the net yearly effect of a downward revision in third quarter growth. The National Statistical Coordination Board announced Thursday that the economy had grown 0.8% in the fourth quarter, growth that was previously projected to fall between 0.6% and 1.6%. Though avoiding recession in 2009, the country produced only 0.9% growth, the slowest performance since the Asian crisis in 1998.

Though evidence of a recovery is certainly afoot, the Bangko Sentral ng Pilipinas has decided to hold policy rates steady until performance gains display more obvious traction. The BSP estimates inflation will fall between 4.5% to 5.4%, which is happily within its yearly target forcast of 3.5% to 5.5%.

After the announcement Thursday, Socioeconomic Planning Chief Augusto Santo told reporters that "This year is a welcome start for all of us: the global rebound is underway, our economy has proven itself resilient, and elections will bring fresh mandates and new energy to our society. We are thus optimistic."

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The following slide is small and thus loses the nuance of such slight changes in the economic atmosphere. I include it nonetheless to visualize WB projections of a robust return to growth for 2010, followed by a slight flattening, perhaps to adjust for the expectations of policy rate changes by the BSP.