Economic growth has started to pick up on the back of stronger investment. Monthly inflation rates have been persistently above the mid-point of the inflation target, and inflationary pressures are likely to remain in place until the effects of tighter monetary policy are felt. Unemployment remains at recordlow levels.
The monetary policy rate will need to rise further to bring inflation back towards the mid-point of the target. The structural factors underlying weak manufacturing performance should be addressed, notably by making further progress on improving infrastructure and by reducing the tax burden and tax complexity. Liquidity provision on foreign exchange markets has bolstered market confidence, and significant reserves would be available in case of turbulence on foreign exchange markets. In light of a high debt service burden on households and fast credit expansion, limiting the ratio of debt-service to income may help to avoid a build-up of financial imbalances.
Note: All data definitions based on internationally comparable standards and may differ in specific cases from common national definitions.