- Most central banks worldwide continue to maintain broad monetary accommodation to support economic recoveries; however, some others have started to, or signaled intention to raise interest rates to stave off looming inflation.
- According to the Central Bank’s Quarterly Index of Real Economic Activity, domestic economic activity
contracted in the fourth quarter of 2020 primarily due to sharp declines in the energy sector.
- The domestic energy sector experienced a further deterioration in output over the first four months of 2021. Available indicators show that non-energy activity continued to be negatively affected by public health restrictions to contain COVID-19.
- Headline inflation has remained well contained in early 2021.
- The fallout from the COVID-19 pandemic continues to hinder financial system credit growth. Growth in credit granted by the consolidated system generally decelerated over 2020 before turning negative in 2021.
- In June 2021, the Monetary Policy Committee held the Repo rate constant at 3.50 per cent following a 150 basis point reduction in March 2020.