Pantheon hikes inflation outlook for 2022, 2023

MANILA, Philippines — UK-based think tank Pantheon Macroeconomics has hiked its inflation forecast for this year and next, after the October print hit its highest in almost 14 years.

Miguel Chanco, chief economist for emerging Asia at Pantheon Macroeconomics, said in a report that the think tank now sees “the 2022 and 2023 full-year averages coming in at 5.7 percent and 3.6 percent, respectively, up from 5.4 percent and three percent previously.”

The Philippine Statistics Authority last week reported that headline inflation surged to 7.7 percent in October, the highest since the 7.8 percent in December 2008.

This brought the average inflation for the January to October period to 5.4 percent, above the central bank’s two to four percent target for the year.

Inflation continued to accelerate in October from 6.9 percent in September, amid faster increases in food prices.

The food and non-alcoholic beverages index rose to 9.4 percent in October from 7.4 percent in September.

For food alone, inflation went up further to 9.8 percent in October from 7.7 percent in September.

“We doubt that the more acute surge in year-on-year food inflation will persist, however, with the rough six-month lead from still-slowing global food inflation suggesting that a sharp U-turn is imminent,” Chanco said.

He said the slowdown in transport inflation to an eight-month low of 12.5 percent in October, as well as housing and utilities inflation, are likely to be a source of disinflation in the coming months.

Earlier, National Statistician Dennis Mapa said there is a substantial probability that inflation would increase in November, citing the upward movement in food prices and the impact of the recent Severe Tropical Storm Paeng.

He said the recent increase in liquefied petroleum gas prices would also be factored in.