Philippines’ Inflation Expected to Align with Target Range by 2024, Forecasts Goldman Sachs and IMF

Goldman Sachs has revised its inflation forecast for the Philippines, projecting a decrease to an average of 6 percent in 2023, down from a previous estimate of 6.2 percent. Looking ahead to 2024, the financial institution expects inflation to further decelerate, aligning with the Bangko Sentral ng Pilipinas’ (BSP) target range of 2 to 4 percent. Despite the positive outlook for 2024, current inflation rates remain notably above the BSP’s upper target band.

Additionally, the International Monetary Fund (IMF) shares a similar perspective on the inflation trajectory. For 2023, the IMF anticipates inflation to ease to 4.3 percent, mirroring the BSP’s latest forecast. The projection for 2024 is even more optimistic, with the IMF estimating a further reduction in inflation to 3.1 percent.

These forecasts suggest a gradual normalization of inflation rates, moving towards the central bank’s target range. The BSP itself had previously forecasted inflation rates ranging from 3.5 to 4.5 percent in 2023 and between 2.3 to 4.3 percent in 2024, with a specific estimate of 3.3 percent for 2024.