Inflation will still settle above four percent this year under the revised series rolled out by the government, analysts at ANZ Research said, with price pressures piling due to new taxes and robust economic growth.
The global bank expects full-year inflation to average 4.1% under the 2012 base year, still above the 2-4% target range set by the Bangko Sentral ng Pilipinas (BSP).
“Despite a milder pace of increase in the new series (relative to the old base), recent trends still point to a significant acceleration in inflation,” ANZ analysts said in a report published Monday, March 19.
“We believe that headline CPI inflation will average 4.1% in 2018 even in the new series, i.e. above the upper bound of the official 2-4% target range. This would also mark a large jump from the 2.9% average in 2017. In our view, inflation of this order warrants policy tightening. However, recent comments from the BSP have doused rate hike expectations.” — Melissa Luz T. Lopez
