Inflation going forward in the near term is expected to continue to be domestically driven with any major downside risks stemming from adverse weather conditions, but also any sharp increases in international oil and food prices. For now, year-end inflation is projected at around 2.5 percent.
A preliminary assessment suggests that some of the measures proposed could be targeted more specifically at the weakest categories. Apart from its temporary nature and the implementation difficulties, the subsidy for persons with low incomes who are unable to exploit all the personal income tax reliefs, introduced only for 2007, might not be very effective in reducing the extension of poverty.