BSP Statement on the Medium-Term Inflation Path
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The October 2022 inflation outturn of 7.7 percent is within the BSP’s forecast range of 7.1 to 7.9 percent, consistent with the BSP’s assessment of inflation remaining above target over the near term as price pressures broaden and signs of further adverse second-round effects emerge. Inflation is projected to remain elevated for the rest of 2022 but will likely decelerate in 2023 due to easing global oil and non-oil prices, negative base effects from transport fare adjustments in 2022, and as the impact of BSP’s cumulative policy rate adjustments take hold on the economy.
Thank you for reading this post, don't forget to subscribe!The risks to the inflation outlook appear to be tilted to the upside for 2022 and 2023 but are seen to be broadly balanced for 2024. The potential impact of higher global non-oil prices, additional transport fare hikes, increased food prices owing to weather disturbances, and sharp rise in sugar prices are the major upside risks to the inflation outlook. Meanwhile, the impact of a weaker-than-expected global economic recovery is the primary downside risk to the outlook.
The Monetary Board will review its assessment of the inflation outlook and macroeconomic prospects in its monetary policy meeting on 17 November 2022. The BSP remains prepared to take all further monetary policy actions necessary to bring inflation back to the target over the medium term. The BSP also continues to strongly urge the timely implementation of non-monetary government interventions to mitigate the impact of persistent supply-side pressures on inflation. ##
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