The monetary tightening, the fiscal measures of early 1995 and the stabilization of the exchange rate had a positive influence on inflation expectations and long-term interest rates.
While the economy appears to be operating with less slack than previously assumed, given the more modest growth profile, it is only anticipated to return to full capacity by the third quarter of 2013.   The dynamics for inflation are similar to those anticipated in October, although its profile is marginally firmer.