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BSP Statement on the Medium-Term Inflation Path

The November 2022 inflation outturn of 8.0 percent is within the BSP’s forecast range of 7.4 to 8.2 percent. Inflation is projected to decelerate in the subsequent months due to easing global oil and non-oil prices, negative base effects, and as the impact of BSP’s cumulative policy rate adjustments work its way to the economy.

The risks to the inflation outlook remain tilted to the upside for 2023 but are seen to be broadly balanced for 2024. The key upside risks are the potential impact on international food prices of higher fertilizer prices, trade restrictions and adverse global weather conditions. Higher food prices from further domestic weather-related disturbances and supply disruptions in key food commodities such as sugar and meat, as well as pending petitions for transport fare hikes were also identified as upside risks to the inflation outlook in the latest round. Meanwhile, the impact of a weaker-than-expected global economic recovery is the primary downside risk to the outlook.

The Monetary Board will continue to assess the country’s inflation outlook and macroeconomic prospects in its monetary policy meeting on 15 December 2022. The BSP remains prepared to take all further monetary policy actions necessary to bring inflation back to a target-consistent path over the medium-term. The BSP is also reassured by the timely implementation of non-monetary government measures to mitigate the impact of persistent supply-side pressures on inflation.


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