Everyone has their own opinion. In our opinion, the decisions we made were sound and that is why we made them.
We consider various indicators. Yes, the economy is in excess supply on the whole. In the second half of last year, growth was close to zero. So supply has caught up with demand and has even surpassed it now. That is one of the main reasons we are seeing less inflationary pressure.
We expect to see stronger growth this year than last year. Supply and demand will increase at roughly the same rate this year, while the output gap will remain essentially unchanged. Next year, we will see a drop.
Those are the inflation indicators we consider in predicting the direction of inflation. They are not the only ones though. We also consider wages, specifically with regard to productivity. We also consider inflation forecasts and the way businesses set their prices. All of these indicators are pointing in the right direction. Some are changing more quickly than others, but they are all going in the right direction. That gives us good reason to be confident that we are on track.