Prices of basic goods and services increased marginally last month to the PH demand. It goes to a point that was within the guidelines of the central bank. But, any further rises would almost certainly be curtailed by the continued low demand arising from the ongoing coronavirus pandemic.
Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno described the June consumer price index of 2.5 percent, up from 2.1 percent in May, as “consistent with the [agency’s] prevailing assessment that inflation pressures remain limited.”
Last week, the central bank had predicted the inflation rate of PH demand. Last month, it would fall within the 1.9–2.7 percent range.
“The current baseline projections indicate a strong inflation climate over the policy horizon,” Diokno said.
In addition, the rate of price rises is going to reach 2.3% in 2020. Then, 2.6% in 2021, and 3.0% in 2022.
The central bank expects domestic economic activity to follow a U- shaped quarterly recovery path with output likely to contract further in the remaining quarters of 2020.
Growth is going to recover in 2021 once the impact of government policy support measures gains traction.
Meanwhile, Diokno said the outlook for the global economy has further deteriorated with considerable uncertainty brought about by the magnitude and duration of containment measures across all economies.
“The BSP remains committed to the use of monetary instruments and regulatory relief measures when needed further in fulfillment of its mandate to promote non-inflationary and sustainable growth,” the central bank chief said.
Separately, ING Bank Manila senior economist Nicholas Mapa noted the price pressures. It remained weak as demand remains crippled by record-high unemployment.
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