Economic growth slowed to 3.5 percent in2013 and 2.7 percent year-on-year in the first half of 2014.The slowdown is the result of a number of factors such asslackening foreign direct investment (FDI), dependence on alimited number of commodity exports, and a difficultexternal economic environment. Consumer lending andremittances continued to support private consumption, butunder-execution of government spending suppressed aggregatedemand. On the supply side, the mining and energy sectorsperformed particularly badly, offsetting positivedevelopments in manufacturing. Year-on-year inflationreached close to zero in August 2014, following a longdecline since energy price increases caused it to flare upin July 2013. Twelve-month inflation slowed to 0.8 percentin August, well below the central bank s 2.5 5.5 percenttarget range. The decline came despite new electricity priceincreases in the same month. On the whole, second-roundprice pressures were minimal. Core inflation, excludingprices for food and fuel, was being held below headlineinflation in the second half of the year.
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