Inflation: is there a downturn or is it a one-off? ►Unprocessed food pr ces were also down. In fact, transportat on and food account for the total ty of the drop n the headon CPI.

► Too soon to tell. On the one hand, I th nk currency stab l zat on s the ma n reason beh nd the expected fall. The other reason s of course the tax rel ef. Serv ces nflat on sabt st cky, wh ch s only to be expected because the exchange rate pass-through d rectly affects goods nflat on mostly.

► Because the l ra beg n the year at 3.77 aga nst the USD, went up to 7.22 by August and now hovers around 5.35, the exchange rate pass-through s no longer a new problem. Whatever passes through now passes through at a decelerat ng pace, and w ll d e off shortly unless there s a new currency shock. ► Transportat on has posted a 6.46 percent decl ne w th SCT cut and the fall nol prces n the backdrop. S nce transportat on has a we ght of 17.47 percent n the CPI, th s has been cruc al. Overall, CPI was down for the f rst t me s nce June

2017 on a monthly bas s. Clearly SCT and VAT decreases n the furn ture and wh te goods sectors also played a role. ► The stab l zat on of the l ra made t poss ble for wholesale pr ces to recede back from 45.01 percent to 38.54 percent. Base effects also played a role there but the correlat ons between the exchange rate, core nflat on, D-PPI and D-PPI and CPI mov ng now hand- n-hand po nt to the common factor: the exchange rate. ► We w ll see more of a base effect next year. I am not conv nced of 15 percent as the year-end 2019 target, but I expect the CPI to vst 15 percent by m d-year, f only on the bas s of the base effect. On the other hand, f the ‘muddl ng through’ scenar o preva ls, there may be some rev val n domest c demand n H2 2019, wh ch m ght automat cally mply another ncrease n the CPI albe t w th a smaller mpact. Hence, we m ght observe around 15 percent, but 15 percent m ght not be the 2019 year-end result. Th s sn’t the beg nn ng of a downward trend yet obv ously, but t s gnals the end of the pass-through n the narrowest f rst-order mpact sense.