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BSP Statement on the Medium-Term Inflation Path

The September 2022 inflation outturn of 6.9 percent is within the BSP’s forecast range of 6.6 to 7.4 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.

Upside risks continue to dominate the inflation outlook in the near term. Price pressures could come from the potential impact of higher global non-oil prices, pending petitions for further transport fare hikes, the impact of weather disturbances on prices of food items, as well as the sharp increase in the price of sugar. Meanwhile, the impact of a weaker-than-expected global economic recovery continues to be the main downside risk to the outlook. Nevertheless, inflation risks are seen to be broadly balanced in the medium-term as global commodity prices ease going forward.

The BSP’s recent policy actions are intended to bring inflation and inflation expectations back to the target to ensure the balanced and sustainable growth of the economy in the medium term. The BSP is prepared to take further policy actions to bring inflation toward a target-consistent path over the medium term, consistent with its primary objective to promote price stability. The BSP also continues to urge timely implementation of non-monetary government interventions to mitigate the impact of persistent supply-side pressures on commodity prices. The BSP will continue to carefully monitor and assess pertinent economic developments that could affect the price dynamics and growth prospects of the country.


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