|Real GDP growth is projected to gain momentum, driven by buoyant exports and a gradual strengthening in domestic demand. Headline inflation is likely to remain moderate in the coming few quarters before gently rising as economic slack is reduced.
The projections assume that the central bank will start increasing its policy rate towards the end of 2014 to contain rising inflation pressures. As economic growth is set to strengthen and fiscal room is limited, additional fiscal consolidation in 2015 would be appropriate. Nevertheless, the automatic stabilisers should be allowed to play around the underlying consolidation path.
Note: All data definitions based on internationally comparable standards and may differ in specific cases from common national definitions.