|A strong rebound of exports, improved confidence and fiscal stimulus have driven a recovery, with manufacturing leading other sectors. The recovery is projected to gain momentum with growth of just over 2½ per cent in 2014 and about 4% in 2015, strengthening further in 2016.
Fiscal policy was expansionary in 2014, but the fiscal stance will return to a neutral position in 2015 and will tighten in 2016 as foreseen in the government’s new fiscal framework. Monetary conditions can remain accommodative for some time, despite the pick-up in growth and an up-tick in inflation that has temporarily put it above the central bank’s target range, as expectations are well anchored and fiscal support will be withdrawn. The significant decline in oil prices, while partially offset by a depreciation of the currency, could nevertheless reduce fiscal revenue substantially, delaying consolidation. On the other hand, the government’s structural reforms should boost investment, notably in the energy and telecommunication sectors.
Note: All data definitions based on internationally comparable standards and may differ in specific cases from common national definitions.