The central bank was under pressure to act because of the effect the weak dollar was having on the real economy. Businessmen blamed the strength of the peso for lost business. The strong peso had helped on the inflation front: inflation for the 12 months to January was 6.19%, down from 7.19% in the year to January 2003.
Lower interest rates should give the economy another boost. The government is already pretty bullish on the prospects for 2004. The finance minister, Alberto Carrasquilla, is forecasting growth of between 3.8% and 4% in 2004.
2003
The preliminary data show that the economy grew by 3.4% in 2003, while the fiscal deficit came in at 2.9% of GDP. The official GDP growth figure is due to be released on 27 February. If the 3.4% rate is confirmed, this would be the highest rate for seven years. The figure shows that the economy is picking up momentum after the 1.7% expansion in 2002.
The fiscal deficit in 2003 was marginally above the government's target of 2.8% of GDP. This itself was a revised target after it became apparent that the 2.5% IMF-set objective for last year would be unattainable, following a rise in debt payments. The 2003 result also marks progress: the deficit in 2002 stood at 3.6% of GDP.
End of preview - This article contains approximately 449 words.
Subscribers: Log in now to read the full article
Not a Subscriber?
Choose from one of the following options
