Headline inflation slowed down further to 0.8 percent year-on-year in October 2019 from 0.9 percent in the previous month and was within the BSP’s expected range of 0.5-1.3 percent for the month. The resulting year-to-date average inflation rate of 2.6 percent remained well within the Government’s target range of 3.0 percent ± 1.0 percentage point for the year. Similarly, core inflation—which excludes selected volatile food and energy items to measure underlying price pressures—eased to 2.6 percent in October from 2.7 percent in the previous month. On the other hand, month-on-month seasonally-adjusted inflation rose to 0.2 percent in October from 0.0 percent in September.
Year-on-year food inflation remained negative in October as prices of rice, corn, vegetables as well as sugar, jam, honey, chocolate, and confectionery continued to decline relative to year-ago levels. Other food items that posted lower year-on-year inflation in October include fish, oils, and fats along with food products not elsewhere classified. At the same time, year-on-year inflation for majority of non-food commodities also went down during the month. This included rollbacks in the prices of most domestic petroleum products, which continued to bring down transport inflation in October 2019.
The latest inflation outturn remains consistent with the BSP’s prevailing assessment of a benign inflation outlook, with average inflation still expected to firmly settle within the Government’s target range of 3.0 percent ± 1.0 percentage point for 2019 - 2021. Going forward, the BSP will continue to keep a close watch over latest economic developments here and abroad to ensure that the monetary policy stance remains consistent with the BSP’s price stability objective.