{"id":7920,"date":"2025-01-29T22:12:36","date_gmt":"2025-01-29T21:12:36","guid":{"rendered":"https:\/\/wsj-crypto.com\/?p=7920"},"modified":"2025-01-29T22:12:36","modified_gmt":"2025-01-29T21:12:36","slug":"inflation-expected-to-stay-within-target-ranges-until-2026","status":"publish","type":"post","link":"https:\/\/wsj-crypto.com\/index.php\/2025\/01\/29\/inflation-expected-to-stay-within-target-ranges-until-2026\/","title":{"rendered":"Inflation Expected to Stay Within Target Ranges Until 2026"},"content":{"rendered":"\n<p class=\"p2\"><span class=\"s2\">PRIVATE SECTOR analysts <\/span>anticipate inflation to stay within <span class=\"s3\">the central bank\u2019s 2-4% objective <\/span>from this year to 2026, as stated by the Bangko Sentral ng Pilipinas (BSP).<\/p>\n<p class=\"p3\">The BSP\u2019s most recent survey of external analysts in its Monetary Policy Report revealed that the average inflation projection for this year is at 3.1%, which is lower than the central bank\u2019s baseline estimate of 3.3%.<\/p>\n<p class=\"p3\">The survey indicated an 82.6% chance that inflation will remain within the target this year and an 83.5% likelihood for 2026.<\/p>\n<p class=\"p3\"><span class=\"s4\">\u201cInflation expectations remain solidly anchored. The risks are generally well-balanced, and it is anticipated that headline inflation will remain low and manageable in the medium term.\u201d<\/span><\/p>\n<p class=\"p3\">For 2026, analysts predict an average inflation of 3.2%, also below the BSP\u2019s forecast of 3.5%.<\/p>\n<p class=\"p3\">Headline inflation averaged 3.2% in 2024, comfortably fitting within the target range. Data for January inflation will be disclosed on Feb. 5.<\/p>\n<p class=\"p3\">The survey highlighted that the favorable inflation outlook is primarily driven by decreasing prices for rice and oil.<\/p>\n<p class=\"p3\">\u201cDownward risks to the inflation forecast are largely derived from falling rice prices, in light of the enforcement of Executive Order (EO) No. 62 and decreasing oil prices,\u201d the BSP commented.<\/p>\n<p class=\"p3\"><span class=\"s5\">President Ferdinand R. Marcos, Jr.<\/span> enacted EO 62 last June, which reduced rice import tariffs to 15% from 35% until 2028, asserting the necessity to control rice prices.<\/p>\n<p class=\"p3\">Rice inflation decreased to 0.8% in December from 5.1% in November and 19.6% a year earlier. Rice typically accounts for the largest share of overall inflation.<\/p>\n<p class=\"p3\">Global crude oil prices are projected to decline further, according to the BSP.<\/p>\n<p class=\"p3\">\u201cFutures prices have diminished due to market anticipations of increased US oil production and expectations of reduced global demand, along with the likelihood of global oversupply.\u201d<\/p>\n<p class=\"p3\">\u201cThis has consequently led to a postponed expected rise in oil production by the Organization of the Petroleum Exporting Countries and other allied nations (OPEC+).\u201d<\/p>\n<p class=\"p3\"><span class=\"s5\">Nonetheless, the central bank cautioned that inflation may breach the 2-4% range if Dubai crude oil prices average over $90 per barrel from this year through 2026. <\/span><\/p>\n<p class=\"p3\"><span class=\"s4\">The Development Budget Coordination Committee forecasts Dubai crude oil to fall between $60 to $80 per barrel from 2025 to 2026.<\/span><\/p>\n<p class=\"p3\">\u201cThese oil price projections consider only direct impacts and do not factor in potential second-round effects on transport fares, food costs, and wage increases.\u201d<\/p>\n<p class=\"p3\">The surveyed analysts also pointed out upward risks to the inflation outlook including supply disruptions caused by geopolitical tensions and unfavorable weather conditions.<\/p>\n<p class=\"p3\">\u201cThe anticipated increase in electricity rates, unexpected wage adjustments, and protectionist US trade policies were also noted as potential upward risks,\u201d it mentioned.<\/p>\n<p class=\"p3\">The BSP additionally indicated the likelihood of rising electricity costs in the near future.<\/p>\n<p class=\"p3\">\u201cIn July 2023, the Supreme Court invalidated the previous cap on Wholesale Electricity Spot Market (WESM) prices for November and December 2013. Electricity rates could increase due to potential rises in generation charges being transferred to consumers.\u201d<\/p>\n<p class=\"p3\">The central bank previously warned that the risks to the inflation outlook remain skewed towards the upside for this year and the following year.<\/p>\n<p class=\"p3\">The BSP anticipates inflation to settle at the midpoint of the 2-4% target until the first half of 2025, subsequently rising to the upper limit of the target from the second half of 2025 to the first half of 2026.<\/p>\n<p class=\"p3\">Inflation is expected to ease closer to the midpoint of the target by the latter half of 2026, propelled by falling global commodity prices, it noted.<\/p>\n<p class=\"p5\"><b>FURTHER EASING<br \/>\n<\/b>In the meantime, analysts surveyed by the BSP also foresee additional monetary policy easing for this year.<\/p>\n<p class=\"p3\">\u201cFor 2025, the prevailing opinion is that the BSP will relax its monetary stance by a range of 50-100 basis points (bps). Meanwhile, analysts have varied insights concerning the target reverse repurchase (RRP) rate for 2026,\u201d stated the BSP.<\/p>\n<p class=\"p3\">Last year, the Monetary Board reduced rates cumulatively by 75 bps, lowering the key rate to 5.75% by the end of 2024.<\/p>\n<p class=\"p3\">\u201cOverall, there is potential for measured monetary policy easing given the inflation remains within target, manageable underlying price pressures, and well-anchored inflation expectations. Nonetheless, upward risks to inflation require close surveillance,\u201d according to the BSP.<\/p>\n<p class=\"p3\">\u201cA further decrease in the policy rate will aid in enhancing the effects of prior monetary easing on market interest rates, lending activities, and aggregate demand.\u201d<\/p>\n<p class=\"p3\"><span class=\"s4\">BSP Governor Eli M. Remolona, Jr. has noted that there is room for further easing as the <\/span><span class=\"s6\">current policy rate remains in \u201crestrictive territory.\u201d However, the central bank is likely to implement further rate reductions in \u201cincremental steps.\u201d<\/span><\/p>\n<p class=\"p5\"><b>\u2018BELOW POTENTIAL\u2019<br \/>\n<\/b><span class=\"s6\">Meanwhile, the BSP believes the Philippine economy will \u201cgrow below potential\u201d in the short term due to subdued demand. The government aims for a growth target of 6-8% for 2025 to 2026.<\/span><\/p>\n<p class=\"p3\">\u201cThe projections for domestic growth indicate a more tempered pace of economic activity up to 2026,\u201d it stated.<\/p>\n<p class=\"p3\">The BSP expected economic growth in 2024 to fall slightly shy of the government\u2019s target of 6-6.5%, following a weaker-than-anticipated third-quarter gross domestic product (GDP) report.<\/p>\n<p class=\"p3\">Data for the fourth-quarter and full-year GDP will be published today (Jan. 30).<\/p>\n<p class=\"p3\"><span class=\"s4\">\u201cNevertheless, GDP growth is projected to see a modest increase and settle near the lower end of <\/span><span class=\"s6\">the targets for 2025 and 2026,\u201d stated the BSP.<\/span><\/p>\n<p class=\"p3\">\u201cThe drop in global oil prices, the easing of the BSP\u2019s monetary policy, and the cut in the reserve requirement ratio are expected to bolster domestic economic activity.\u201d<\/p>\n<p class=\"p3\">Domestic demand is also expected to \u201cremain steady though subdued.\u201d \u2014 <b>Luisa Maria Jacinta C. Jocson<\/b><\/p>\n<p><br \/>\n<br \/><a href=\"https:\/\/www.bworldonline.com\/top-stories\/2025\/01\/30\/649867\/inflation-likely-within-target-until-26\/\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>PRIVATE SECTOR analysts anticipate inflation to stay within the central bank\u2019s 2-4% objective from this year to 2026, as stated by the Bangko Sentral ng Pilipinas (BSP). The BSP\u2019s most recent survey of external analysts in its Monetary Policy Report revealed that the average inflation projection for this year is at 3.1%, which is lower<\/p>\n","protected":false},"author":3,"featured_media":7921,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[25],"tags":[1063],"class_list":["post-7920","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy-and-markets","tag-return-a-list-of-comma-separated-tags-from-this-title-inflation-likely-within-target-until-26"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Inflation Expected to Stay Within Target Ranges Until 2026 - WSJ-Crypto<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/wsj-crypto.com\/index.php\/2025\/01\/29\/inflation-expected-to-stay-within-target-ranges-until-2026\/\" \/>\n<meta property=\"og:locale\" content=\"it_IT\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Inflation Expected to Stay Within Target Ranges Until 2026 - WSJ-Crypto\" \/>\n<meta property=\"og:description\" content=\"PRIVATE SECTOR analysts anticipate inflation to stay within the central bank\u2019s 2-4% objective from this year to 2026, as stated by the Bangko Sentral ng Pilipinas (BSP). 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