THE Bangko Sentral ng Pilipinas (BSP) now expects April inflation to be slower due to the decline in electricity prices and select food items.
In its month-ahead inflation, BSP said April inflation may have averaged 6.3 to 7.1 percent, lower than the 7.6-percent inflation recorded in March 2023.
“Lower electricity rates, the decline in prices of fish and vegetables, and rollback in LPG prices contributed to easing price pressures during the month,” BSP said.
If the low end of the target is achieved, this will be the same rate in August 2022 and the lowest since June 2022 when inflation was at 6.1 percent.
If the high end of the forecast is attained, this will mark the sixth consecutive month that inflation is above 7 percent.
However, BSP said, upward pressures still remain. These include higher domestic petroleum prices, increased rice and meat prices, and peso depreciation.
“Going forward, the BSP remains prepared to respond appropriately to continuing inflation risks in line with its data-dependent approach to monetary policy formulation,” BSP said.
Earlier, BSP said inflation and high interest rates will not dampen the country’s performance in the first quarter.
BSP Governor Felipe M. Medalla told reporters that GDP growth may be around 6 percent in the January to March 2023 period. This is lower than the 8 percent posted in the same period last year.
Medalla also said that while the Development Budget Coordination Committee (DBCC) retained the country’s growth targets, maintaining targets this year is not a problem.
However, Medalla said, 2024 may be “too far away” to determine whether the target should be maintained. He said one of the main reasons for this is high inflation here and abroad.
Medalla said sticky inflation in the United States may lead the Federal Reserve to continue its tight monetary policy. While the BSP is no longer keen on tracking the movements of the Fed, it will track inflation as it remains an inflation-targeting central bank.
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