MANILA, Philippines - The central bank will review its inflation targets for this year and next year as stronger-than-expected economic growth could fuel an uptick in consumer prices.
"The inflation forecasts will have to be reviewed, and that is what we will do this week," Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco told reporters.
The BSP earlier expected inflation to average anywhere between 3.5% and 5.5% this year, and between 3% and 5% in 2011.
In the first quarter, the economy grew by 7.3% versus 0.5% in the same period last year, beating most expectations.
Faster economic growth, which reflects higher incomes, normally results in increase in demand for goods and services. As a result, inflation may accelerate.
The inflation projection by the central bank influences its decision whether or not to change key policy rates. Currently, the overnight borrowing rate stands at 4%, while overnight lending rate stands at 6%. Both are historic lows.
No comments:
Post a Comment