It is well known that informality is linked to small-scale production, low investment in new technologies, and poor incentives for human capital accumulation. Additionally, a prominent feature of large service segments, such as education and health, is a lack of or limited competition among providers, lowering incentives to seek efficiency.
This was the result of our cautious preparation and communication, as well as from the ongoing positive growth momentum. Looking ahead, the growth rate, unemployment, the labour market, the survey data, all provide positive indications that we are moving towards a shrinking output gap as well as an improving labour market. These will eventually produce higher nominal wage growth and thus higher inflation.