BSP forecasts April inflation to dip below 7% amid stable exchange rates and lower energy costs

The Bangko Sentral ng Pilipinas (BSP) has projected a potential drop in the country’s inflation rate to below seven percent for the month of April, attributed to stable exchange rates, lower power costs, and a rollback in petroleum product prices.

The April consumer price index (CPI) forecast range is seen to be between 6.3 and 7.1 percent, compared to the actual March CPI of 7.6 percent.

However, the BSP cautioned that if the peso were to depreciate vis-à-vis the US dollar, inflation could hit the higher end of the forecast.

Despite this, the BSP remains prepared to respond appropriately to continuing inflation risks in line with its data-dependent approach to monetary policy formulation.

BSP Governor Felipe M. Medalla has already hinted that the Monetary Board could pause its policy rate increases in the event of a third consecutive negative inflation month-on-month.

The Monetary Board is expected to revise current inflation forecasts of six percent for 2023 and 2.9 percent for 2024 during its monetary policy decision on May 18, and may even cut the policy rate if inflation continues to decline for six straight months.

Medalla remains confident that inflation will fall to within the two percent to four percent target range by November or December of this year, barring any more external shocks.

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