The March 2023 inflation outturn of 7.6 percent is within the BSP’s forecast range of 7.4 to 8.2 percent, consistent with the overall assessment that inflation will remain elevated over the near term before gradually decelerating back to target range towards end-2023.
The balance of risks to the inflation outlook for 2023 and 2024 also continue to tilt significantly towards the upside. The effect of supply shortages on domestic food prices remains a concern, while the potential impact of higher transport fares, increasing electricity rates, as well as above-average wage adjustments in 2023 point to the nature of price pressures. On the downside, the impact of a weaker-than-expected global economic recovery continues to dampen inflation.
The BSP will continue to adjust its monetary policy stance as necessary to prevent the further broadening of price pressures as well as the emergence of additional second order effects. The BSP also continues to call for the timely and effective implementation of non-monetary government measures to mitigate the impact of persistent supply-side pressures on inflation.