PR
“The July 2020 inflation of 2.7 percent was within the BSP’s forecast range of 2.2 – 3.0 percent. The latest inflation outturn is consistent with the BSP’s prevailing assessment that inflation is expected to remain benign over the policy horizon due largely to the potential adverse impact of Covid-19 on the domestic and global economic prospects.
The latest baseline forecasts indicate that inflation is likely to settle close to the mid-point of the government’s target range of 3.0 percent ± 1.0 percentage point for 2020 to 2022. The contraction in domestic economic activity is seen to have bottomed out in Q2 2020. For the rest of year, output is expected to decline at a slower pace as firms and households gradually adjust to post-pandemic conditions. GDP growth is expected to recover in 2021 as government policy support measures fully gain traction.
The Monetary Board will consider the latest inflation outlook along with the release of Q2 2020 GDP at the upcoming monetary policy meeting on 20 August 2020. The BSP remains ready to deploy all available measures in its toolkit in fulfillment of its policy mandate as it continues to assess the impact of the global health crisis on the domestic economy.”
