Economy starting to recover After last year’s contraction of 0.2%, we expect GDP growth of 1.4% this year and an acceleration to 2.2% next year. The recovery should be driven by renewed growth in domestic demand, both consumption and investment. Continued increases in real wages should help boost household spending. In contrast, industrial activity will remain weak this year.

Inflation to remain close to central bank’s 2% target We expect headline inflation to reach 2.1% this year and fall to 1.8% next year. While food prices should decline this year, core and regulated price growth are likely to remain above 2%. In 2025, monetary tightening will be fully reflected in core inflation and lower wholesale energy prices in regulated prices.