Inflation and its short-term outlook have continued on an upward path, and levels near 10% are anticipated by mid-2022. The higher inflation is having a significant impact on households, and continues to respond mainly to the overspending of recent quarters. This impact has been heightened against a backdrop of significant cost-push pressures, which have increased again due to the commodity price shock triggered by Russia’s invasion of Ukraine. The central projection scenario considers that in the latter part of 2022 inflation will begin to converge to the 3% target, which will be reached within the two-year horizon. Resolving the imbalances that accumulated in the economy in recent quarters is vital for this convergence, fundamentally by adjusting the fiscal and monetary impulse, among other measures. Consistent with this, and with a less favorable external scenario, after the excessive growth of 2021, the economy will grow under its potential in 2022 and 2023, with contractions in private consumption and investment. The Board has rapidly adjusted the MPR to a contractionary level, which is necessary for it to contribute to the closing of the activity gap and the convergence of inflation within the monetary policy horizon. Also, considers that, if the assumptions in the central scenario prove correct, future increases in the MPR would be smaller than those of recent quarters.