Metro Manila (CNN Philippines, May 12) — Amid cooling inflation numbers, an economist warned Bangko Sentral ng Pilipinas (BSP) against slashing interest rates and said the agency should wait a little bit longer.
HSBC Chief Asia Economist Frederic Neumann on Thursday said core inflation is still high and cutting interests could be a risky strategy.“Core inflation is still very high – close to 8%, almost. And so premature easing might be a bit of a risky strategy,” Neumann told CNN Philippines’ The Final Word.“We think that perhaps we want to wait a little bit before we start to slash interest rates,” he added. “Again, we’ve done a lot of work to get prices under control. Let’s keep vigilant for a few more months before we start easing back again.
Consumers received a big relief from rising prices as the inflation rate continued its downward trend, sliding to 6.6% in April.
Meanwhile, the Philippine economy expanded by 6.4% in the first three months of 2023 — its slowest yet since it exited a pandemic-induced recession in 2021, data from the Philippine Statistics Authority showed.
The figure is also past the 6.04% average forecast in a CNN Philippines poll of 10 economists, with analysts citing persistent high inflation and elevated interest hikes weighing on the country’s growth.
