June inflation 'cools' to 5.4% y/y
The Philippine Statistics Authority (PSA) [link] said that the rate of price increases on goods slowed to 5.4% in June, as compared to June of last year. Core inflation was at 7.4%, down from 7.7% in May.
This is the fifth straight month of cooling inflation since January. The BSP said that it expects our average annual inflation to settle at around 5.4% for the year, and for monthly inflation figures to fall most significantly toward the end of the year. The BSP did note that this assumes the lack of additional “supply shocks”.
MB BOTTOM-LINE
Just remember that inflation is a rate of change, so it’s easy to get distracted by how year-on-year inflation is “falling” and make the incorrect mental leap from that to think that this will mean prices are coming down just as fast.
On average, prices are still going up, only just a little slower than before. There are no price reductions baked into the BSP’s forecast. I don’t think I’m being an edgelord by saying this, but I think as consumers and investors it’s worth noting that a “cooling” June year-on-year inflation figure doesn’t mean that food will be cheaper next month, or that consumers will be more able to afford the basic necessities, or that travelers will have a greater proportion of their earnings to spend on discretionary items. Just means that compared to the runaway price increases we were experiencing last June, the price increases this June were a little less extreme.
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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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