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Consumer goods price growth towards the holiday season likely remained manageable despite typhoon disruptions and economic disruptions caused by movement and travel restrictions forced by the Covid-19 pandemic, the Bank said. Central.
Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno told reporters Tuesday that inflation in December was likely between 2.9% and 3.7%.
If inflation reaches the BSP forecast floor for the month, inflation will average 2.6 percent for 2020. If it reaches the ceiling of the forecast range, inflation will average 2.7 percent for 2020. Both remain within 2 percent of the forecast range. government to 4 percent. target percentage range of inflation for the year.
“Higher prices for domestic petroleum products and key agricultural items contributed to upward price pressures during the month. These could be partially offset by the downward adjustment in electricity rates in the areas served by Meralco, along with slightly lower rice prices and the continued appreciation of the peso, “said the governor.
Inflation in November reached 3.3 percent. At its last monetary policy meeting of the year, the BSP revised its inflation target to 2.6 percent from 2.4 percent at the November meeting.
By 2021, the BSP expects inflation to reach 3.2 percent from the previous expectation of 2.7 percent. Meanwhile, it kept its expectation unchanged at 2.9 percent for 2022.
Economists expect inflation to trend downward in 2021 as they view November inflation of 3.3 percent as a one-time event.
“We believe that the rally in November will become a unique event and prices will return to the days before the typhoon. Therefore, we maintain our annual forecast of 2.6 percent for the year, ”analysts said in the Market Call publication of First Metro Investment Corporation (FMIC) and the University of Asia and the Pacific (UA&P).
More cuts?
More tame inflation, economists said, will give the BSP more leeway to cut rates again if the economy needs it.
Annually, the BSP holds eight meetings every six weeks. By 2020, five of these meetings were rate cuts to bolster monetary policy support for the pandemic-ravaged economy.
“Going forward, the BSP will continue to monitor economic and financial developments to ensure that its core mandate of price stability is achieved leading to balanced and sustainable economic growth,” Diokno said Tuesday.
In total, the Central Bank has already cut its rates by 200 basis points: 25 basis points in February, 50 basis points in March, another 50 basis points at an off-schedule meeting of the Monetary Board in April, another 50 basis points . cut in June and the last cut of 25 basis points last month.
