Inflation is expected to return to the central bank's 2-4% tolerance band in the fourth quarter of 2022 before reaching the 3% mid-term "price stability" target in the first half of 2023, the policymakers said after a review of the central bank's latest quarterly Inflation Report.
Core inflation, which excludes volatile food and fuel prices, will rise in the coming months and "be close to 6%" by mid-2022, lifted by higher commodity and energy prices, as well as by higher freight costs and supply-chain disruptions.
The primary projections of the Inflation Report, published after the meeting, show average annual CPI reaching 5.1% in 2021.
The report includes forecast ranges for CPI in the following two years: 4.7-5.1% for 2022 and 2.5-3.5% for 2023. The report forecasts GDP growth of 6.3-6.5% for 2021 and 4%-5% for 2022. Risks to inflation "continue to be on the upside," the council said.
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