Real GDP growth should average about 2 1/2 per cent in the first half of 2007, rising to about 2 3/4 per cent in the second half of the year. In 2008, growth is projected to stay in line with the growth of potential output, estimated to be 2.8 per cent, keeping the economy operating near its full production capacity.
Due to these factors, the stock and flow channels of monetary policy might counteract each other. While the effect of monetary loosening/tightening on output and hence inflation might  5  See Csermely, Á. and Szalai, Z. (2010): “The role of financial imbalances in monetary policy” MNB Bulletin 2010 June. 6  See.