Growth to remain stable, though rising uncertainties weigh on further prospects
GDP growth remained robust also going into the second quarter of 2022, with the headline figure increasing 8.2% y/y. The detailed structure revealed ongoing favorable support from the domestic demand side, while net exports also had positive contribution amid strong services exports. Going forward, outlook for the remainder of the year is looking somewhat less encouraging as growth is expected to decelerate amid global factors. Accounting for the high 1H22 performance, we revised our FY22 forecast to 5.8%, while underlining increasing uncertainty over 2023 outlook.
Inflation trajectory remained under strong upside pressures, as CPI spiked to one of the highest prints ever (11% y/y as of Aug-22), with surging energy and food prices continuing to work as most pronounced pro-inflationary factors. We see average FY22 CPI around 9.3% mark, before gradually easing towards lower levels in the 2H23. Further consolidation efforts on the fiscal side should continue, as pandemic-related measures fade out. However, certain pressures on the budget performance are arising from the government's efforts to tackle the energy crisis.