Inflation Forecast Upgraded, Growth Kept Unchanged, IMAD Tells Govt
The Institute for Macroeconomic Analysis and Development (IMAD) has acquainted the government with an upgraded inflation forecast for this year. Apart from predicting lower inflation, IMAD also said it was keeping its growth outlook unchanged in its spring report.
According to IMAD, this year's inflation rate is to stand at 2.5 percent instead of the 3 percent forecast in autumn. Moreover, next year's inflation outlook has been brought down from 2.5 percent to 2.3 percent. The growth forecast for 2005 was kept unchanged at 3.8 percent. However, the 2006 figure was upgraded by 0.2 percentage points to 4.1 percent.
However, IMAD said it did change the expected structure of growth for this year, with exports expected to contribute more to economic expansion. In line with the institute's forecasts, exports are to grow by 6.5 percent this year.
The decision to keep the growth forecast unchanged comes in spite of forecast-beating growth in 2004, when the economy expanded by 4.6 percent, the fastest rate since 1999.
Moreover, IMAD said in its report that the economic growth should also result in positive developments on the labour market in 2005 and 2006. As a result, the trend of strong job growth is expected to persist throughout both years.
The report also tells the government that the preservation of current macroeconomic policies is the key to keeping inflation under wraps.
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