Continued strong external demand as well as a strengthening of domestic demand where the main drivers behind the subsequent economic recovery (slide 3). At present, it seems that some of the downside risks we had identified earlier have been materialising.
Moving within a band also leaves some discretion to the central bank and can also provide more flexibility in the case of unforeseeable future price shocks. What models should be used for forecasting inflation? 3  BIS Review 31/1999  It must be understood that inflation targeting is about the future.