Friday, December 3, 2021

PH Economist expects September inflation rising to 5%-5.6%

Thirteen Economist projected an accelerating inflation rate from September due to higher prices of basic and primed commodities as well as electric consumptions in Manila areas which ranges from 5 percent to 5.6 percent.

Basic products such oil, selected fruits and vegetables, rice and as well as power rates in areas being serviced by the Manila Electric Company are expensively increasing due to bad weather – induced supply constraints and the pandemic.

In an interview statement last Thursday of Bangko Sentral ng Pilipinas (BSP), they said that such factors are seen to be countered by the drop in meat prices and strengthens the peso against US dollar.

Economist of Barclays’ Shreya Sodhani and Pantheon Macroeconomics’ Miguel Chanco both forecasted the highest percentage of 5.2 percent on this year. Sodhani added, “We do not expect inflation to be a risk to economic recovery now as the price pressures are mostly supply-driven and should subside by end of the year”, responding to the Bangko Sentral ng Pilipinas (BSP) statement that the current situation is only “transitory” in the environment.

Other economists, seen recovery from the pandemic – induced economic downfall was already taking hit from elevated inflation. It is said that, “Consumers are forced to tighten their belts further”, Bank of the Philippine Islands’ Emilio Neri said.

Meanwhile, there are four economists who had assumptions below 5 percent: Citi’s Nalin Chutchotitham, Standard Chartered’s Jonathan Koh and Oxford Economics’ Makoto Tsuchiya forecasted 4.9 percent, while the lowest estimation was at 4.8 percent from Capital Economics’ Gareth Leather.

Tsuchiya added, “Persistently high inflation is a risk to the Philippines economy as it is reducing households’ disposable income, leaving them with less to spend on their things. Moreover, there is a risk that inflation proves sticky with businesses passing on higher input costs to consumers. However, this is not our base case given still soft demand”.

Sources: Philippine Daily Inquirer, Gov.ph

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