Inflation was up 8.1% in December
National Statistician Dennis Mapa [link] said that headline inflation and core inflation were both up from November, to 8.1% and 6.9%, respectively.
The additional inflationary pressure was driven largely by price increases for food stables like fruits and vegetables.
The BSP had projected December inflation to fall within the range of 7.8% to 8.6%, with analysts (on average) predicting that December inflation would land at around 8.2%.
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While that’s not good, it’s marginally lower than many expected, and it could turn out to validate the BSP’s position that inflation would likely peak in December.
Is it true that inflation has peaked, or is this just another point on a graph that is still headed higher?
Have to wait and see. Sometimes bad news can be kind of good, and this is one of those times.
So, it sucks that inflation is still increasing and that most people are spending more and more of their paycheck on the basic necessities of life, but the result is a little less terrible than we expected, so it might be a sign that the speed of the price increases may be lessening.
Will the BSP still need to raise rates? Almost certainly. Both the BSP and the US Federal Reserve still believe that more needs to be done to tame inflation.
The real question is how high will rates go, and at what point will the BSP be able to take its foot off the gas? Remember, we aren’t even talking about rate reductions yet. We’re just talking about when the BSP can stop increasing rates. The general cost of living is going to remain high for quite some time. This is the new normal.
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Merkado Barkada's opinions are provided for informational purposes only, and should not be considered a recommendation to buy or sell any particular stock. These daily articles are not updated with new information, so each investor must do his or her own due diligence before trading, as the facts and figures in each particular article may have changed.
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