That this is an impact of one-off factors on inflation is suggested by low and relatively stable core inflation, which hovered at around 2% year-on-year. According to our latest projection, over the two-year horizon covered by the projection we expect inflation to move within the bounds of the target tolerance band of 3±1.5%.
Although top-line consumer price inflation was boosted by the run-up in energy prices, core consumer price inflation remained relatively steady, at about 2 percent for the year. One of the significant challenges for a policymaker is to be able to discern the underlying trends in real activity and inflation in the midst of the inevitable noise and shocks that come along.