Summary: Growth moderated to below trend in 2013–15. In 2015, the output gap widened notwithstanding the modest pick-up in growth to 3¾ percent. GDP is expected to return to potential over the medium-term. Inflation dove into negative territory following the sharp decline in imported oil prices, but is projected to return to the 2- 4 percent target range by end-2016. The exchange rate (XR) remained stable despite the removal of the band, and reserve accumulation resumed strongly. Risks to the outlook are tilted to the downside, notably from large fiscal deficits and high dollarization.

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