There are also significant geopolitical risks that could increase the risk aversion of international investors. Other geopolitical risks relate to a possible exacerbation of the refugee crisis. 4.1 Medium- to long-term challenges In addition to the above domestic and external risks to the recovery, there are also some medium- to long-term challenges that need to be addressed in order to strengthen the positive outlook.
If economic developments are broadly in line with our forecast and inflation comes down as predicted, then we shouldn't need to raise rates further. But if evidence begins to accumulate to show that inflation is not declining in line with our forecast, we are prepared to raise our policy rate further.