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GDP growth looks set to remain weak over the coming quarters, as tight monetary policy at home and subdued activity abroad weigh on demand. Meanwhile, inflationary pressures should continue to ease, as below-trend growth, easing disruption from the pandemic and more favourable base effects help to put downward pressure on headline and core inflation. A few central banks have already started to cut interest rates, and we don’t think it will be long before other countries in the region join in the easing cycle.
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