The third factor behind my assertion is that the flow of incoming survey data indicates a turnaround in inflationary pressures in line with the cyclical upturn, as evidenced for example by the latest PMI data. Both output and input prices as well as European Commission survey data on selling prices have rebounded since the turn of the year.
In the sphere of real economic activity, some scope has been created for higher growth in both production and expenditure. It will, of course, be good for future development if any increase in expenditure at this juncture could be concentrated in fixed investment rather than in private sector or government consumption expenditure.