Putting precise numbers on the magnitude of this contraction is difficult, but our current thinking is along the following lines: National output is likely to fall by around 10 per cent over the first half of 2020, with most of this decline taking place in the June quarter.
Why 2% inflation is the right objective for monetary policy But if our aim is to avoid both excessive inflation and deflation, why do we not set a 0% inflation objective? The answer is that the rate of inflation we aim for and our ability to stabilise prices are intertwined.