Inflation to start decelerating by January, back to target range by July –BSP

The Bangko Sentral ng Pilipinas (BSP) expects inflation to start decelerating by January and to normalize back to the target range by July, according to Governor Felipe Medalla.

Speaking on The Mangahas Interviews, Medalla said inflation is set to start normalizing after it peaks in December, following the 14-year high of 8.0% last month.

“Well ang tingin ko, huhupa na ang inflation (I see inflation taming), so inflation will be normal by the third, the fourth quarter of 2023. This hopefully will continue for the rest of 2024., so inflation will be normal by the third, the fourth quarter of 2023. This hopefully will continue for the rest of 2024,” he said.

“January will be lower than December. February inflation will be lower than January, and so on and so forth so that by July or August next year, normal na uli ang inflation,” he added.

Just last week, the BSP said it expects inflation to average 5.8% this year, unchanged from the previous projections made last month. This is also higher than the target range of 2% to 4%.

The peak is projected this December, due to higher food prices caused by recent typhoons, along with higher prices of liquefied petroleum gas (LPG) and electricity rates.

The Manila Electric Company (Meralco) announced higher electricity rates, while oil firms hiked the prices of LPG products for December.

For 2023, the Monetary Board expects inflation at 4.5%, higher than the 4.3% it recorded during the previous monetary policy meeting. — DVM, GMA News