This fight against inflation is a global one— we’re not fighting it alone.1 After 11 months of policy rate increases, we’re seeing signs that higher interest rates are beginning to rebalance the economy. Household spending has moderated, particularly in interest-rate-sensitive sectors. The labour market remains tight, but early signs of easing are evident.
External debt-to-GDP ratio stood at 27.3 percent as of end-September 2021 compared with about 60.0 percent in mid-2000s. Gross international reserves (GIR) stood at a hefty $ billion as of end-December 2021, providing ample cushion against unforeseen demand for foreign exchange.