Releasing the results of their Monetary Policy Committee (PPK) meeting on Monday, the central bank stated that developments in energy and food prices led to fluctuations in inflation. “After a sharp increase in February driven by adverse weather conditions, vegetable prices displayed a partial decline in March. On the other hand, meat prices continued to rise, albeit at a slower pace, and remained the main driver of higher food prices, ” the central bank statement said, adding that food and energy items account for 4.62 percent of annual inflation as of the end of the first quarter.
According to the central bank, food and energy prices are expected to remain volatile over the coming period. “The committee expects that core inflation indicators will increase in April as well, owing to the temporary tax cuts of the previous year, but will continue to remain at levels below the target.”
Noting that first-quarter data suggest that economic activity has continued to recover in 2010, the central bank said domestic demand is following a gradual growth trend with sectors more sensitive to domestic demand experiencing relatively stronger growth performances. The bank said, however, uncertainty regarding foreign demand remains.
