Moreover, annual core inflation decelerated to 3.8 percent in December 2020 from 4 percent in November 2020, according to the CBE.


“Accordingly, annual headline urban inflation registered an average of 5.2 percent during the fourth quarter of 2020, coming below the lower target band of 6 percent previously announced in 2018,” the CBE said.


This came as a result of the impact of the COVID-19 pandemic’s outbreak and its resulting government containment measures on economic activity.


In addition, the government’s successful implementation of several measures to avoid supply shortages in the market contributed to lower inflation rates.


Meanwhile, the CBE highlighted the preemptive measures it had taken to support economic activity while remaining consistent with achieving its price stability objective over the medium term.


“Real GDP growth recorded a preliminary figure of 0.7 percent during the third quarter of 2020, up from -1.7 percent during the second quarter 2020, and select demand-side leading indices continue to recover in the fourth quarter of 2020 Q4,” said CBE.


Moreover, the unemployment rate decreased to 7.3 percent in the third quarter of 2020, down from 9.6 percent in the second quarter of 2020, according to the CBE.


The CBE noted that economic activity remains subdued globally despite the accommodative financial conditions, driven by the second wave of the COVID-19 pandemic and its subsequent containment measures that continue to weigh on the near-term outlook.


On the other hand, the path to global economic recovery still depends on the efficacy, availability and the rollout pace of vaccines, which could ease the uncertainty regarding economic activity over the medium term, while international oil prices have continued to rise due to supply side developments.


The CBE said that the MPC closely monitors all economic developments and is committed to utilising all available tools to support the recovery of economic activity in the country alongside its price stability mandate. 


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