Tuesday, 5 May 2009

Philippine June inflation seen below 1%


INFLATION WILL FALL to its lowest in over 22 years at less than 1% in June to account for rapid falls in commodity prices in the past year, a senior central bank official said on Monday.

Inflation has not been below 1% since March 1987, when prices fell 0.6% from a year earlier, and would be significantly lower than March’s inflation of 6.4%.

Still, average inflation this year would still be around 3.42%, a level forecast by the central bank at its rates meeting in April, the official told reporters. Inflation in 2008 was 9.3%. "Inflation will fall below 1% in June because of base effects," the official, who asked not to be identified because of the sensitivity of the subject, said.

Last year, commodities prices rose to record levels but have since fallen sharply, so annual comparisons in monthly consumer price data are having a dramatic affect on headline inflation. This is known as the base effect. — Reuters

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