Major Contraction Ahead

We expect to see a collapse in economic growth in 2009 as domestic and external factors combine to deliver a crushing blow to economic activity. We see real GDP growth contracting by 5.6% in 2009 from a projected 4.8% rate of expansion in 2008. Meanwhile, slowing demand will do little to ease inflation, in our view, which will continue to accelerate in line with the trend seen in previous recessions.

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