Domestic demand driven GDP growth could come in between 3.5–4% y/y in 2025. We maintain our 4% growth forecast for 2026, but see upside risks from carry-over effects, ongoing monetary easing cycle, signals of a neutral fiscal stance, and resilient global activity.

Consumer prices rose by 0.9% in Dec, leading its annual inflation to fall to 30.9% by end 2025. Lower than expected Dec figure and supportive early year tax adjustments create room for a similar 150bps rate cut in January; however, the persistent stickiness in inflation trend and expectations requires to remain cautious.