Planning Bureau adjusts inflation expectations downwards for this year

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The Planning Bureau expects inflation of 3.1 percent this year, according to the latest forecasts on Tuesday. The previous forecast in April expected an average annual inflation of 3.3 percent.

For comparison: last year inflation was 4.06 percent on an annual basis, in 2022 it was 9.59 percent. Average annual inflation of 1.9 percent is forecast for next year.

The health index, which is used, among other things, for the indexation of wages, social benefits and rental prices, is expected to be 3.1 percent this year and 2.0 percent in 2025. Last year that percentage was 4.33 percent, in 2022 at 9.25 percent.

In April, the key index for government wages and social benefits was exceeded. As a result, social benefits in May and wages for government employees in June will be adjusted by 2 percent to the increased lifespan. The last time the central index was exceeded was in October last year. The Planning Bureau expects the next exceedance in February 2025.

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