Inflation is set to fall sharply, reflecting both the global recession and slower growth of administered prices.
The government has responded to the downturn with two stimulus packages, but there is little room for further discretionary fiscal easing. Monetary policy has been relaxed gradually since August 2008, and additional interest rate cuts are possible. Measures to ease the regulatory burden on business could also reduce the pressure on the enterprise sector without raising the fiscal deficit.
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©OECD Observer No 274, July 2009