THE BANGKO SENTRAL ng Pilipinas (BSP) will likely begin easing by the fourth quarter when inflation is expected to have firmly settled within target, Metropolitan Bank & Trust Co. (Metrobank) said.
“In line with the BSP’s guidance, we forecast domestic headline inflation to peak in July, which in turn would only be observable in early August,” the Metrobank Research and Market Strategy Department said in a note.
The central bank earlier said inflation could temporarily accelerate above the 2-4% target from May to July due to base effects. However, inflation is expected to return to the target after July.
“This supports our view that the BSP will start its easing cycle in the fourth quarter, rather than the third quarter, when inflation expectations have settled well within the BSP’s 2-4% range,” Metrobank said.
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