MANILA – Economists surveyed by the Bangko Sentral ng Pilipinas (BSP) in the second quarter this year forecast further deceleration of average rate of price increases.
According to the BSP’s second-quarter 2020 inflation report, forecasts of 25 private firm economists surveyed by the central bank showed an average rate of 2.3 percent, lower than the 2.9 percent average in the survey held in the first quarter of this year.
Mean inflation forecasts for both 2021 and 2022 also went down to 2.9 percent from 3.0 percent previously, it said.
“Analysts expect inflation to hover near the lower end of the target range in 2020, with risks to the inflation outlook generally leaning towards the upside given the anticipated recovery in domestic demand following the recent relaxation of lockdown and quarantine measures,” it said.
The report said key upside risks to rate of price increases include the possible strong rebound in global oil prices, increase in private consumption following the recent easing of quarantine measures, challenging supply chain and logistics of basic and essential commodities, higher prices of food, including rice; and adverse weather conditions like typhoons that can affect food supply.
On the other hand, downside risks to inflation include the subdued domestic demand because of high unemployment after some business closed down because of the pandemic, the persistent downside pressures on global crude oil prices, and price ceilings imposed by the government on select commodities.
Inflation posted an uptick last June to 2.5 percent from month-ago’s 2.1 percent, ending its deceleration since the start of the year.
Average inflation to date stood at 2.5 percent, at the lower half of the government’s 2 to 4-percent target band for this year until 2022.