ADB sees PH inflation above target until 2023

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Metro Manila (CNN Philippines, September 21) — Prices of basic goods in the Philippines could rise at faster paces until next year as supply-related concerns persist, said the Asian Development Bank (ADB) in its latest report.

In its Asian Development Outlook (ADO) 2022 update published Wednesday, the ADB said it hiked its inflation forecast for the country to 5.3% this year from 4.9% in the July ADO Supplement.

“Inflation is expected to remain elevated over the rest of the year due primarily to supply-side factors, including elevated global commodity prices," said ADB on its website.

"Bad weather has constrained the domestic supply of some agriculture commodities, and petitions for additional transport fare increases have been submitted by transport groups to the government,” it also said.

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The regional lender expects Philippine inflation to ease to 4.3% in 2023, steady from its July report. It cited the eventual decrease in global oil and non-oil costs and cumulative policy rate adjustment.

This means ADB’s forecasts until 2023 are both above the 2-4% target band of the Bangko Sentral ng Pilipinas (BSP).

For its part, the BSP expects inflation to hit 5.4% in 2022 and 4% next year. As of August, it has averaged 4.3%.

Meanwhile, the ADB kept its growth forecasts of 6.5% for this year and 6.3% for 2023 as stated in its July publication.