To put the situation in perspective, global inflation increased from 4.3 percent in 2007 to 6.4 percent in 2008; this affected the outlook for global economic growth, which slowed from 5.2 percent to 3.4 percent. As a result, international oil prices fell sharply in the latter half of the year, especially following the escalation of the global financial and economic crisis in September.
The combined effect was that, thereafter, international inflation began to decline. Here at home, inflation rose during most of 2008, and far exceeded the medium-term inflation objective of 3-6 percent at 15.1 percent in August, before declining to 13.7 percent at year-end.