Growth strengthened in the first half of the year, driven by a surge in public infrastructure and robust private consumption. Since May, international capital market turbulence has pushed interest rates up and the exchange rate down. Financing and credit conditions nonetheless remain supportive and export growth should increase as global demand recovers. Growth is projected to pick up to around 4% in 2014 and 2015.
Preserving hard-won confidence in the integrity of macroeconomic management is crucial. The general government fiscal accounts should be made more transparent. The quality of banking supervision should be preserved, notably by keeping the growth of consumer and SME loans under close surveillance. Given the magnitude of external financing needs, the projected widening of the external deficit could call for cooling-off measures even if the economy is running below potential.
Note: All data definitions based on internationally comparable standards and may differ in specific cases from common national definitions.