Summary:KEY ISSUES
Context: The current account is worsening, coinciding with peak debt service, limited
market access, and low reserves. Although the authorities have taken ad hoc measures
to curb acute exchange rate pressures during the summer, a stronger policy response
is urgently needed to reduce external imbalances and mitigate risks.
Challenges: Facilitating external adjustment through a consistent set of policies is the
key short-term priority. The medium-term challenge remains to increase efficiency and
competitiveness through deep structural reform, with strong measures taken up front
to enhance credibility.
Policy recommendations:
No further wage increases in 2013–14, to curb demand and regain competitiveness;
Sharply reduce directed lending, to limit credit growth and contingent liabilities,
and reduce external imbalances;
Substantially scale back foreign exchange market intervention and tighten
monetary policy to facilitate exchange rate and balance of payments adjustment;
Adopt comprehensive and ambitious structural reforms to raise sustainable growth
Legal Disclaimer:
EIN Presswire provides this news content "as is" without warranty of any kind. We do not accept any responsibility or liability
for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this
article. If you have any complaints or copyright issues related to this article, kindly contact the author above.