The economy continues to recover, thanks to stronger consumer spending and tourism receipts. Declining unemployment and a foreign trade surplus are also signs of improvements. Growth is projected to increase as residential construction rebounds and investment in large energy-related projects picks up. As a result of this upswing, the slack in resource utilisation should be fully eliminated in 2015.
Monetary policy should continue to seek to lower inflation, which would require some tightening as slack is taken up, especially if wage pressures intensify. After fiscal slippages in 2013, the government’s plans to reduce the budget deficit should be carried through, as this is needed to ensure that government debt remains on a downward path. Capital controls should be lifted as soon as this can be done in an orderly way.
Note: All data definitions based on internationally comparable standards and may differ in specific cases from common national definitions.