At the monetary policy assessment in December, the National Bank decided to lower the target range for the three-month Libor rate by another 0.5 percentage points to 1.25%–2.25%. It acted in response to the further deterioration of the economic outlook and the associated decrease in inflationary pressure. The inflation forecast published at the news conference on 7 December is based on a three-month Libor of 1.75% and anticipates an average inflation rate of 0.9% for 2002, 1.3% for 2003 and 1.5% for 2004. At the same time, the National Bank based its forecast on an increase in real GDP of 1.5% in 2001 and around 1% in 2002.
