A fall in global commodity prices in 2009 led to a marked slowdown in inflation, to an annual average of 6.9%, from 24.5% in 2008. Commodity prices rebounded in 2010, exerting upward pressure on inflation, and over the year as a whole average inflation came in at 8%. A faster pick-up was prevented by the reversal of utility price rises by the provisional government in April 2010, and by the sluggish performance of the economy. We expect that inflation will accelerate in 2011 as the economy returns to growth, and as global commodity prices rise further. The continuing downward trend of the som will also create imported inflationary pressures. We forecast a sharp acceleration in inflation in 2011, to 19%, largely owing to high global commodity prices. Inflation is set to slow in 2012 as global price pressures abate, with prices for food, oil and industrial raw commodities all expected to fall significantly.