Inflation stable, says Central Bank
Core inflation has remained stable in the first half of 2014, the Central Bank said yesterday.
“On a year-on-year basis, core inflation stood at 2.5 per cent per cent by the end of June 2014. Headline inflation slowed to 3.0 per cent while food inflation eased for the third consecutive month to 3.5 per cent in June 2014,” the Bank stated in its latest Monetary Policy announcement.
“Rising consumer demand, higher Government spending and second round effects from the recent increase in cement prices could help to accelerate inflationary pressure later in the year,” it noted.
With core inflationary pressures well contained, the Central Bank said it was maintaining the ‘Repo’ rate at 2.75 per cent which remains supportive of current economic conditions.
As of late July 2014, signals are mixed regarding the outlook for global growth, the Bank stated.
“In its latest World Economic Outlook (WEO) Update, the IMF indicates that the global recovery continues but at an uneven pace, and that downside risks remain.”
At home, the corporate sector is still cautiously optimistic in its outlook for business activity and economic strength, the Bank said.
Results from the Central Bank’s second Business Confidence Survey, conducted in the second quarter of 2014 in conjunction with the Arthur Lok Jack Graduate School of Business, showed that almost 80 per cent of firms expect to increase their production levels over the next six months, it added.