Second, policymakers should be prepared for decisive action in response to financial disruptions. In such circumstances, the most likely outcome – referred to as the modal forecast – for the economy may be fairly benign, but there may be a significant risk of more severe adverse outcomes.
The most often asked question in relation to oil is – Is the BSP concerned with deflation, especially given the latest inflation outturns have been below 1 pct. and the fact that our forecast for August inflation is 0.2 to 1 pct.? With global growth prospects weakening, global oil prices may remain soft. Fuel and fuelrelated items account for about 9 pct.