The unemployment rate is likely to soar to 10% next year. Inflation should fall to very low levels and the current account should improve to near balance in 2010.
Restoring the smooth functioning of the banking system is the top priority. This entails completing the bank restructuring process quickly so that the new banks can resume lending, especially to firms. Removing exchange controls as soon as feasible would facilitate access to foreign credit markets. The large, and necessary, fiscal consolidation programme provides an opportunity to enhance the efficiency of public expenditure, but will also require significant spending cuts and tax increases.
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©OECD Observer No 274, July 2009