Annual Inflation Expected to be Between 3.5-5.0% This Year

Highlights from the policy statement:

• Risks surrounding global disinflation, volatility in international investor sentiment and the temporary rise in domestic inflation, expected in the middle of the year, warrant a careful approach to monetary policy in the coming months.
• In the coming months, decisions on any further reductions in the base rate and their optimal pace will be made on the basis of this information, in a data-driven manner.
• According to the assessment of the Monetary Council, the continued strong and general disinflation allows a further reduction in the base rate, while the increasing financial market risk aversion justifies a slower pace than in February.
• Annual inflation is expected to be between 3.5 and 5.0 percent this year, indicating lower inflation path compared to the December projection. According to the projection of the MNB, inflation may be between 2.5 and 3.5 percent in 2025 and 2026.
• The decline in core inflation, capturing underlying developments, will stop in the second quarter and it is expected to fluctuate between 4.5 and 5.0 percent in the remainder of the year.

See the full release here.