Galt & Taggart Predicts Average Inflation of 5.2%

According to the forecast of Galt&Taggart, the average inflation in 2023 will be 5.2%; By the end of the year, inflation will approach the target of 3%.

"According to our forecast, the average annual inflation in 2023 is expected at the level of 5.2%. However, we expect inflation to approach the target of 3.0% by the end of 2023. Along with the reduction of inflation, we think that the SEB will be able to reduce the monetary policy rate from the current 11.0% to 9.0% by the end of 2023.

The formation of annual inflation in December 2022 was significantly influenced by price changes in the following groups: food and non-alcoholic beverages (+16.3%, 5.41 pp), housing, water, electricity. Energy, gas (+15.8%, 1.58pp), transport (+5.5%, 0.64pp), alcoholic beverages, tobacco (+9.3%, 0.62pp), restaurants (+14.8%, 0.60pp), furniture, household items, housekeeping (+8.8%, 0.45pp) and health care (-3.6%, -0.36pp). However, in December 2022, there was a 0.3% deflation compared to the previous month, which was significantly influenced by the decrease in prices in the category of transport (-2.7% m/m, -0.31pp)," Galt&Taggart's report noted.