Higher energy and food prices, combined with the continuation of higher government spending, contributed to a pick-up in the pace of price rises in 2010. Recent data have revealed that food prices have spiked, probably because of the negative impact of the regional drought, as well as flooding earlier in 2010, which damaged crops. The resurgence of inflationary pressures in the final months of 2010 helped to push annual average inflation up to 5.7%. We expect food prices to remain elevated in the initial months of 2011; combined with higher global prices for oil, this will result in annual average inflation of 9.2% in 2011. Slower economic growth, and weaker domestic demand and money supply growth than in the boom years, will limit inflationary pressures. However, large inflows of oil-related foreign exchange and a loose fiscal policy will continue to exert substantial upward pressure on prices throughout the forecast period, preventing more rapid disinflation in 2011-15. Export revenue will be partly sterilised through the use of the offshore oil fund, although transfers from the fund to the state budget will remain high.