Above-target inflation averaging 6 percent in 2023 is forecast in January this year to have averaged no more than 3.6 percent, the Bangko Sentral ng Pilipinas said on Wednesday.
The forecast rate proximates the upper bound of the target 2 percent to 4 percent inflation range this year and develops as the government reported below-target growth of only 5.6 percent versus the 6 percent to 7 percent target.
The best case scenario is for inflation in January to average as low as 2.8 percent.
According to the BSP, the higher price of such consumption items as rice, meat, fruits and fish, higher petroleum product prices and electricity and water rates, all contributed to forecast inflation in January.
Also, the phased adjustment in excise tax rates and the weakening of the local currency the peso relative to the US dollar contributed to the forecast.
Lower vegetable and sugar prices observed during the survey period compensated for some of the price pressure, the BSP said.
Inflation of only 3.9 percent in December last year from 4.1 percent a year earlier proved lower than market consensus averaging of 4.1 percent.
Emerging market and developing economies that include the Philippines posted inflation averaging 4.1 percent last year, according to the International Monetary Fund. This class of IMF-member countries is forecast this year to post inflation of the same magnitude this year and slightly higher to 4.2 percent next year.
The outlook is for inflation this year averaging 3.7 percent based on government projections bared in November last year.
