Central Bank Predicting
a 9% Inflation Rate For
2009
The Banco Central
(Central Bank) says it
will direct its economic
policies this year to
keep inflation to 9%,
give or take on point up
or down, even though the
economy is expected to
grow only 2.2%.
The Central Bank said it
will also seek to reduce
"significantly" the
current deficit, which
can easily spiral when
the value of imports and
services is greater than
exports.
Financing the deficit is
the major problem for
the Central Bank.
Another of the Central
Bank's objectives is to
continue with a strategy
to reduce the risk of
financial contagion from
the restriction of
liquidity on an
international level on
the national financial
system.
At least that is the
goal of the board of
directors of the Central
Bank and as posted on
the Central Bank's
website.
Inflation in 2009 was
13.9%, much higher than
the 8% predicted by the
Central Bank at the
beginning of last year.
The Central Bank
explained that factors
like lower growth in
production, will mean
less business investment
and household
consumption, which means
less demand for goods
and services, a factor
that will help reduce
pressure on prices and
keep inflation low.
Consumer spending is
expected to grow only
2.4, almost half of the
4.% growth in 2008.
|
