The New York-based think tank GlobalSource Partners noted that a particularly strong 1.7 -percent month-on-month jump in consumer prices sent the headline inflation rate to a 14-year high 8.7 percent in January. | RonWDomingoINQ /PDI
“As it is, the current momentum will likely see the headline inflation rate continue to trek up and bring the average inflation rate for the year to around 7 percent, much higher than our previous 4.8 percent forecast,” he said.
“With January inflation surprising on the upside and expected to raise inflation expectations, a minimum 25 bp [0.25 ppt] increase in domestic policy rates looks guaranteed at the moment,” Bernardo said. ING Bank senior economist Nichola Mapa said that following the January results, the BSP will need to front load its rate hikes to rein in inflation expectations which are now in danger of deviating from the BSP’s own forecast as well as target range of 2 percent to 4 percent.
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