Against this background, it is the Bank’s view that inflation in the first half of 2003 will be around the present level of 10 to 12 percent, before falling by the middle of the year and during the remaining months of 2003.
This projection is based on the fact that most of the year-on-year effect of VAT on the Consumer Price Index will drop out after July 2003. The outlook is also predicated on the success of monetary policy in restraining credit growth, and the fact that government spending will indeed slow down.