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Moderate recession to drive inflation lower

The economy is heading for a moderate recession, as higher interest rates weigh on domestic demand and exports contract amid the global downturn. Weaker demand, together with lower commodity prices and an easing of supply shortages, should drive CPI inflation below 2% by mid-2023. That will allow the Bank to start loosening policy next year, setting the stage for a rebound in GDP growth to 2.3% in 2024. 

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