23 October 2012

Here are some of the main issues from today’s official statement:
•    “The core inflation was even lower than anticipated recently…”
•    “Meanwhile, the total CPI inflation also fell well below the 2% target…it’s expected to return to the target by the end of 2013, which is a bit later than projected earlier.”
•    “The real estate market activity is expected to go down, although the household debt level is predicted to rise before stabilizing.”
•    “The decision concerning any withdrawal of the rate stimulus will be discussed and weighed very carefully considering global, domestic developments and, of course, the household debt level.”
That last issue is a new one, as earlier the Bank didn’t give such strict links between the rate hikes and the household debt level. Nevertheless, this warning doesn’t really convince people that low rates can be risky for the whole economy.

Leave a Reply

Your email address will not be published.