Consumer and wholesale inflation in 1994 was the highest ever, at an annualised 125.5 per cent and 149.6 per cent respectively, according to the State Institute of Statistics. The target pledged to the IMF for the second half of 1994 was for 20 per cent inflation.

The wholesale price index, used by the government to measure inflation, rose 8.3 per cent in December. This has been attributed to public sector price hikes in late November and early December.

The figures suggest that the government's projected reduction to a rate of 22.5 per cent by end-1995 is unlikely to be achieved. Unofficial forecasts for inflation at the end of 1995 range between 60-100 per cent.

In its half-year economic outlook, the OECD predicted that the economy could grow by 3.5 per cent in 1995, and inflation fall to 50 per cent, but only if the government implemented stringent structural and fiscal reforms (MEED 6:1:95).