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ASIA ECONOMICS: Nomura Lifts Its 2021 CPI Inflation View for The Philippines After January's Jump

· 02/08/2021 01:25

06:10 AM EST, 02/08/2021 (MT Newswires) -- Nomura said it raised its 2021 consumer price index (CPI) inflation forecast to 3.9% from 2.9% for the Philippines after January's higher-than-expected jump.

CPI inflation rose sharply to 4.2% y/y in January from 3.5% in December, driven by a continued surge in food prices, noted the bank. This was well above expectations and breached the central bank's -- Bangko Sentral ng Pilipinas (BSP) -- 2%-4% inflation target for the first time since 2019.

Rising oil prices also contributed, as reflected in higher transport costs. The combination of persistent food price pressures and higher oil prices might resurrect concerns from the inflation scare of 2018, despite a weaker economy, added Nomura.

Core inflation edged up to 3.4% from 3.3%, reflecting still-subdued demand conditions.