With the arrival of spring, inflation started to go down. Consumer price index decreased by 0.1 % in March and inflation dropped to 7.1 % y/y from 7.5 % in February. The impact from the tax reform and the deregulation of rent have subsided, giving way to lowering holiday prices at the end of winter tourist season. Decreasing food prices also contributed to disinflation.
The descent of inflation from its peak, reached in January and February, must have given a relief to the central bank. If disinflation continues in the following months, it will decrease the concerns over the negative impact on inflation expectations and the pressure for interest rates hike. In the current battle between inflation and the central bank, the sides are becoming balanced. However, we will know the winner only in the next year, or more precisely after the salary negotiations at the turn of the year.