IMF Chief Economist Gita Gopinath said the improvement was largely due to increased fiscal support, including a new $1.9 trillion U.S. aid package, accelerated vaccinations and continued adaptation of economic activity to overcome pandemic restrictions.
Taking all these observations into account, YoY inflation for next month may remain between 5.5−7.5 percent.
The Monthly Economic Indicator (MEI), which is based on combining monthly data of indicators that are proven to be correlated with GDP at constant prices shows continued strong growth in January, in continuation with what was observed in the previous seven months.
The issue is how best combine to the commitment to short- term support with a credible medium-term fiscal strategy.
Now the measures are non-discriminatory. With time, more and more sectors approach normality, it will be time to wean off the corporate sector from public support. Different sectors will have different recovery dynamics.