Fall Round of the CBBH Mid-term Macroeconomic Projections

The Central Bank kept the projection of economic activity in 2023 unchanged, at the level of 1.6%, while the projection of inflation was corrected downwards, to the level of 6.3%. In the next two years, we expect the recovery of economic activity, and further weakening of inflationary pressures.

PDF - Fall Round of the CBBH Mid-term Macroeconomic Projections

Key notes:

• In the autumn round of medium-term macroeconomic projections, we publish projections of key macroeconomic variables for the 2023-2025 horizon. In the projection period, we expect mild to moderate growth in economic activity and further weakening of inflationary pressures.
• Compared to the May round of medium-term macroeconomic projections (for the period 2023-2024), the expected growth of real GDP is unchanged, and amounts to 1.6%. In 2024, as a result of new information on the weakening of external demand, but also persistent inflation that reduces real household consumption, a slightly lower real economic growth is projected, compared to the May round of projections, to the level of 2.1%. According to the first estimates, the growth of economic activity could be intensified in 2025, at a rate of 3.5%.
• In 2023, we project inflation of 6.3%, which is 1.4 percentage points lower than the round of medium-term projections from May 2023, and consistent with the latest nowcasts on the inflation in the short term. We expect a gradual weakening of inflationary pressures until the end of the projection period.
• We continue to emphasize that the economy is not in a classic business cycle, and that the estimated values of real GDP, its components, and other macroeconomic variables are exposed to an extremely high degree of uncertainty.
• We assess that the risks for inflation above the projected are higher compared to the first round of projections in 2023. Global geopolitical risks put pressure on the prices of energy and other raw materials on the global market. Also, the most of the inflationary pressures are, at the moment, the consequence of the rise in domestic prices, and a further rise in energy and labor prices on the domestic market is also possible.