First, overseas economies are expected to moderately increase their growth rates as advanced economies continue to see firm recovery and its positive effects gradually spread to emerging economies. In particular, the U.S. economy is expected to gradually accelerate its pace of recovery as the firmness in the household sector spreads to the corporate sector.
2 A second line of argument in favour of positive rates of inflation has to do with limited downward flexibility in prices and nominal wages. Notably, if wages are rigid to downside movements economic adjustment to shocks could become exceedingly sluggish and a smooth response to economic shocks might be difficult to achieve.