Deutsche Bank sees steady June inflation
Inflation likely held steady at 6.8 percent in June, as higher electricity prices offset declines in the cost of other key consumer goods, Deutsche Bank said.
“While private transport inflation likely eased further alongside the fall in oil prices, this is likely to be offset by higher electricity rates,” the bank said in a note to clients.
The projection was slightly higher than the median estimate of 12 economists polled by the Inquirer, which stood at 6.7 percent. Still, both figures were within the Bangko Sentral ng Pilipinas’ (BSP) forecast range of 6 percent to 7 percent for June.
Overall, the projections suggested that inflation stayed above the 3-percent target of the central bank, underscoring the challenge facing policymakers as they weigh persistent price pressures against slowing economic growth.
The Philippine Statistics Authority will release the June inflation data today.
Last month, the BSP increased its key policy rate by 25 basis points (bps) to 4.75 percent, lifting total rate hikes in the current cycle to 50 bps. The central bank tightened policy to counter inflation risks linked to the conflict in the Middle East and the prospect of a severe El Niño.
Gross domestic product expanded 2.8 percent in the first quarter, the slowest pace since the postpandemic rebound, amid a major corruption scandal and higher oil prices that squeezed consumers and businesses.
Reflecting the more challenging inflation outlook, the BSP now expects inflation to average 6.4 percent this year, up from an earlier forecast of 6.3 percent. Its projection for 2027 was also raised to 4.5 percent from 4.3 percent.
Policymakers also said they will “take necessary actions to ensure inflation returns to its 3-percent target, in keeping with its primary mandate to ensure price stability.”
