April Inflation Higher at 3.8 Percent

Headline inflation edged higher at 3.8 percent year-on-year in April from 3.7 percent in March.

This is within the BSP's forecast range of 3.5 – 4.3 percent for the month. The resulting year-to-date average of 3.4 percent was within the Government's inflation target range of 3.0 percent ± 1.0 percentage point for the year. On a month-on-month seasonally adjusted basis, headline inflation slowed down to 0.2 percent in April from 0.3 percent in the previous month. Meanwhile, core inflation, which excludes selected volatile food and energy items and measures underlying demand-side price pressures, was lower at 3.2 percent year-on-year in April from 3.4 percent in March.

Inflation pressures were driven by faster price increases for food items. In particular, year-on-year vegetables and fish inflation accelerated in April from negative inflation readings in March. Rice inflation in April remained elevated, although slightly slower compared to last month. Meanwhile, year-on-year non-food inflation was broadly steady for the third consecutive month, as higher gasoline and diesel prices were offset by slower inflation for housing, water, electricity, gas and other fuels as well as restaurants and accommodation services.

The latest inflation outturn is consistent with the BSP's projections that inflation is likely to accelerate temporarily in the next two quarters of the year due to the possible impact of adverse weather conditions on domestic agricultural output as well as positive base effects. Nonetheless, the BSP expects average inflation to return to the target range for full year 2024 and 2025. The Monetary Board will consider the latest inflation and Q1 2024 GDP outturns, among other information, at its upcoming monetary policy meeting on 16 May 2024. (PR)