Core inflation and GDP projection from the December 2021 inflation report

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Core inflation and GDP projection from the December 2021 inflation report

The fourth wave of the pandemic and the emergence of new viral variants have increased the risks surrounding the recovery. Because of this situation, we have prepared forecast ranges. We took into account the risk perception of decision makers and the volatility of macroeconomic time series to determine the bands. Projections are based on information available for the period ending December 11, 2021. Our forecast was based on endogenous monetary policy hypothesis.

2020

2021

2022

2023

2024

Inflation (percent)

3.3

5.1

4.7 – 5.1

2.5 – 3.5

2.5 – 3.5

Economic growth (percent)

-4.7

6.3 – 6.5

4.0 – 5.0

3.5 – 4.5

3.0 – 4.0

Inflation projection fan chart

(based on unadjusted data)

Percent

Percent

8

8

seven

Tolerance band

seven

6

6

Inflation target

5

5

4

4

3

3

2

2

1

1

0

0

-1

2013

2023

-1

2012

2014

2015

2016

2017

2018

2019

2020

2021

2022

2024

Note: The inflation forecast shown in the fan chart shows the expected profile of the CPI over the 12-quarter horizon.

GDP projection fan chart

(annual rate of change)

8

Percent

Percent

8

6

6

4

4

2

2

0

0

-2

-2

-4

-4

-6

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

-6


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Shawn Beecher

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