From the first perspective, we will examine the prospects for economic activity and prices for one to two years ahead, assessing whether the most likely outlook is for the economy to follow a path of sustainable growth under price stability. Note that the focus is on the outlook.
This is because it takes considerable time for monetary policy actions to filter through into the economy and prices. It is necessary, therefore, to conduct monetary policy in a forward-looking manner, taking into account expected economic and price developments. The key to achieving this is to establish what is the most likely outlook.