December inflation seen at 2.1 percent in 'upward normalization': analyst


Posted at Jan 06 2020 10:29 AM

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MANILA – Inflation likely accelerated in December but still within the Bangko Sentral ng Pilipinas' 2 to 4 percent goal, an analyst said Monday. 

December inflation could settle at 2.1 percent as the effect of a high base from the previous year fades, said RCBC head of Economics and Industry Research Michael Ricafort.

People shop for fruits in stalls at the Divisoria public market in Manila on December 31, 2019. Customers flock the market for their last minute shopping to buy fruits in preparation for the incoming new year. George Calvelo, ABS-CBN News

"We have the peak inflation at 6.7 percent in October 2018. It has already eased thereafter so that would result in some upward normalization in inflation," Ricafort said. 

A “prudent” Bangko Sentral will consider global risks when making any policy decisions this year, he said.
President Rodrigo Duterte’s expected signing of the P4.1 trillion budget on Monday is a “positive catalyst” for the country’s gross domestic product growth, Ricafort said. 

Ricafort said the economy likely grew 6.6 to 6.7 percent in the fourth quarter of 2019 and could grow 7 percent in the first and second quarters of 2020.