The January 2022 inflation of 3.0% is consistent with BSP expectations that inflation will decelerate further in coming months, reverting back to the target range over the policy horizon.
The sustained economic growth in the fourth quarter of 2021 reflects easing community restrictions and the resulting improvement in mobility and market sentiment.
However, the lingering threat of COVID-19 infections due to more virulent variants and its potential impact on broader global economic activity continues to cast significant uncertainty on the near-term outlook for growth.
Given a manageable inflation outlook, the BSP sees ample scope to keep a patient hand on its various policy levers, while keeping an eye on potential risks to inflation and the financial system.
The BSP stands ready to respond to emerging developments in keeping with its primary mandate to promote price and financial stability conducive to sustainable economic growth.
The Monetary Board will review its assessment of the inflation outlook along with the latest GDP outturn in its monetary policy meeting on Feb. 17, 2022. (BSP)  – bny
