HEADLINE inflation rose further to 5.4 percent year-on-year in May from 4.9 percent in the previous month.
This is within the BSP’s month-ahead forecast of 5.0-5.8 percent for May. The resulting year-to-date average inflation of 4.1 percent is above the Government’s average inflation target range of 2.0-4.0 percent for 2022. On a month-on-month seasonally adjusted basis, inflation eased to 0.5 percent in May from 1.0 percent in April.
The rise in headline inflation was due largely to faster increases in the prices of food and transport. The main contributors to the increase in food inflation are meat, fish, and vegetables albeit most food commodities also posted higher year-on-year inflation in May relative to the previous month.
Non-food inflation also went up due mainly to the increase in gasoline and diesel prices which, in turn, more than offset the reduction in electricity rates and prices of liquefied petroleum gas during the month.
The latest inflation outturn remains consistent with the BSP’s assessment that inflation will remain elevated in the near term as supply-side pressures persist. Given these conditions, the BSP continues to support sustained implementation of non-monetary interventions by the National Government to mitigate the impact of supply constraints.
At the same time, the BSP remains watchful over evolving price trends, particularly the prospects of further second-round effects and stands ready to undertake appropriate measures as needed to safeguard its price stability objective.
