Economists have raised their forecast for inflation for the current year.
Economists from the private sector expressedtheir infl
Forecast for the year ahead 2021
Despite recent supply disruptions, analysts predict that through 2025 there will be continued growth, with expectations for 2021 remaining unchanged.fl
The Bangko Sentral ng Pilipinas (BSP) stated that it aims to reach the 2-4% target range by 2024 and 2025.
2021 year-end inflation is seen to be somewhat higher than the
According to the BSP’s September survey of outside experts, the projected average year-end inflation for 2021 is slightly higher than the previous estimate.fl
The projected growth rate for 2023, as reported by analysts, increased from 5.5% to 5.9% in the August survey.
Economists’ mean infl
The projected growth rate for 2024 and 2025 has increased to 3.7% (previously 3.5%) and 3.5% (previously 3.4%), respectively.
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In 2021, the rate of inflation is expected to be 5.8%, then decrease to 3.5% in 2024 and 3.4% in 2025.
The BSP stated in the summary of the September 21 Monetary Board meeting that experts predict a rise in inflation once again, caused by recent supply disruptions both within the country and internationally.
The statement also predicts potential increases in inflation, primarily caused by disruptions in supply such as adverse weather conditions and trade limitations.
During its September 21st gathering, the Monetary Board maintained the primary interest rate at a level of 6.25%, which is the highest it has been in nearly 16 years. This decision came after a series of increases in borrowing expenses totaling 425 basis points, which took place between May 2022 and March 2023.
The BSP stated that the Monetary Board has decided to keep current monetary policies in place, but also reiterated their commitment to resume tightening measures in response to potential risks to inflation and the possibility of inflation expectations increasing.
The governing body of the central bank also suggested implementing additional measures, aside from monetary policies, such as temporarily reducing import tariffs and ensuring prompt delivery of imported goods.
“The BSP affirms its commitment to achieving price stability by aiming to restore inflation to a target-consistent track in the medium term, in accordance with its primary responsibility.”
However, the risks to the infl
The central bank reported that the current projections for inflation are positive and may result in exceeding the 2-4% target in the coming year.
According to the BSP, the inflation forecast is at risk due to the possibility of increased transportation costs. This is due to transport groups filing petitions for fare increases in August 2023, which is influenced by rising oil prices.
The Land Transportation Franchising and Regulatory Board has given the go-ahead for a nationwide increase in provisional jeepney fares, with the minimum fare now set at P13 starting on October 8. For modern jeepneys, the minimum fare will be P15.
The BSP stated that there are other potential factors that could increase inflation, such as the effects of El Niño on food costs and utility rates, possible increases in minimum wage, and rising prices of important food products due to limited supply.
According to BSP Governor Eli M. Remolona, Jr., the Monetary Board may continue to tighten monetary policies at their upcoming policy-setting meeting on November 16 if there are ongoing risks to the inflation forecast.
Mr. Remolona also insinuated the possibility of an off
The increase in the rate of cycling has been acknowledged, however, according to Keisha B. Ta-asan, the BSP must assess the most recent data before making a decision.