Household consumption expenditure appears to have improved and turned (weakly) positive (1,6 per cent) in the final quarter of 2009, after five consecutive quarters of negative growth. In the first quarter it measured 5,7 per cent quarter-on-quarter annualised, though some moderation may be expected. This is also reflected in the credit extension numbers, which although remaining low, recently turned positive.
The inflation outlook remains favourable: in May it measured 4,6 per cent, and we expect inflation to remain within the target range for the remainder of the forecast period, but our forecasts are that it will begin to rise moderately by the fourth quarter of 2010.