Average inflation for the Philippines this year would be four percent despite the reduction in the central bank’s projection, according to Fitch Solutions.
The unit of Fitch Group said these projections are above the midpoint of the government’s 2-4 percent target band until 2023.
The Bangko Sentral ng Pilipinas’ (BSP) policy-making Monetary Board (MB) earlier slashed the central bank’s 2021 average inflation forecast to 3.9 percent from 4.2 percent but hiked the 2022 projection to 3 percent from 2.8 percent.
The cut in this year’s inflation projection factored in the impact of a lower tariff on pork importation while the reason behind the change in next year’s inflation projection is the rise in global oil prices.
Domestic inflation is still elevated due to supply constraints on pork meat because of the African swine fever, among others, and the rise in global oil prices.