'Godzilla El Niño' is wreaking havoc with Philippine central bank's inflation forecasts
The Philippine central bank is running policy scenarios for a severe El Niño on top of the oil shock, with inflation at a three-year high.
TL;DR
- The Philippine central bank is planning for a severe El Niño combined with a prolonged oil shock.
- Inflation in the Philippines has reached 7.2% in September, a three-year high, with rice prices increasing by 18%.
- The full impact of El Niño on prices is expected from November through February.
- The central bank has already raised its benchmark rate to 5% and may implement further hikes.
- A severe drought due to El Niño could reduce domestic food supply and increase global rice prices.