Inflation expected to fall below 7% mark in H2 2024 (BCT)

Inflation should gradually ease and fall below 7% (year-on-year) in the second half of 2024, the Central Bank of Tunisia (BCT) said in a recent note.Inflation is expected to return to an annual average of 7% in 2024, from 9.3% in 2023, before stabilising at 6% in 2025, the same source said."The new forecasts confirm the continuation of the gradual easing of inflation, although rates would still remain at high levels in the short and medium term," the BCT added.The annual average inflation rate for administered price products is expected to be 4.2% in 2024-2025.As for inflation in fresh products, it is expected to gradually decline from 16.2% in 2023 to 10% in 2024 and then to 7.1% in 2025, while core inflation would increase from 9.1% in 2023 to 7.3% in 2024 and 6.4% in 2025.According to the CenBank, "the pace of disinflation would be slow due to increases in wage costs and the presence of demand pressures on production capacity in several sectors of activity, notably the agricultural sector"."The disinflationary path would be supported in the short term by the transmission of the effects of the previous falls in international prices of raw materials and basic products".However, the BCT considers that "the accentuation of financial constraints on the state budget and the increased burden of operating costs could lead to upward adjustments of some administered prices in the future".Source: Agence Tunis Afrique Presse