Overview
- The central bank lowered the benchmark by 50 basis points at its Feb. 13 meeting, seeking relief for a slowing war-time economy after prolonged high borrowing costs.
- Officials said any additional cuts will depend on a sustained slowdown in prices and stable inflation expectations as they aim for a 4% inflation target.
- Inflation was 6.3% as of Feb. 9, with a temporary January price jump tied to a value‑added tax increase and broader consumption tax changes.
- The baseline outlook keeps monetary conditions restrictive this year, with the bank expecting domestic demand to cool and business sentiment pointing to moderation.
- The government expects 1.3% growth in 2026 and the central bank forecasts 0.5–1.5%, following a tightening cycle that peaked at 21% in September 2024.