“STAGFLATION” is unlikely to pose an immediate risk to the Philippine economy, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said.
“The BSP does not view ‘stagflation’ — an economic condition characterized by slow growth, high unemployment, and rising inflation — as an immediate risk to the Philippine economy,” he said in a statement on Thursday.
“While domestic inflation is seen to remain elevated in the near term, as a result of supply-side factors linked to volatile global commodity prices, inflation is expected to revert to the government’s target range of 2-4% by 2023. In the meantime, the balance of risks to the inflation outlook now leans toward the upside for both 2022 and 2023,” Mr. Diokno said.
“The BSP will remain vigilant over emerging price and output conditions and will undertake necessary action to ensure that monetary policy settings remain appropriately calibrated, consistent with the BSP’s price and financial stability mandates,” Mr. Diokno said.The Monetary Board kicked oits tightening cycle by raising the policy rate, the yield on the BSP’s overnight reverse repurchase facility, by 25 basis points to 2.25% during its May 19 meeting to temper rising inflation.
“Just over two years after COVID-19 caused the deepest global recession since World War II, the world economy is again in danger,” World Bank Group President David Malpass said in the Global Economic Prospects report released earlier this month.
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