Inflation On Its 6-month Low In December According To A Poll
A Reuters poll suggests that inflation may have slowed to a 6-month low in December. The slow decline of inflation can be credited to the easing of food and fuel prices, based on the poll. Due to this, it is likely that the Bangko Sentral ng Pilipinas would leave policy rates unchanged this year.
The median forecast in a poll of 10 economists was for the consumer price index to have risen 5.6 percent in December from a year earlier, which would be within the BSP’s 5.2 to 6 percent projection for the month.
While the expected outcome is still outside the BSP’s 2 to 4 percent target for 2018 and this year, it would mark the second straight month that inflation has slowed and the first time since August that the print was below 6 percent.
The BSP left the rate on its overnight reverse repurchase facility on hold on Dec. 13 after five successive hikes, after inflation dropped to a 4-month low of 6.0 percent in November. And with the inflation slowly easing up due to the stabilization of food and fuel prices, and as the brunt of the higher taxes on some commodities starting to fade, the BSP’s rate tightening cycle may come to a close and it could even cut rates this year, according to the economists.
The central bank also expects inflation to return to its target range this year, with the average seen at 3.18 percent from the expected 5.2 percent average in 2018.