However, with growth still below potential, downward pressures on prices are expected to linger.
A pick-up in credit growth is helping the economy regain momentum, but it will be important for financial sector supervisors to keep an eye on the quality of banks' portfolios. Given the low level of public debt and ample cash holdings, the government has room for further fiscal expansion to boost activity in 2010 if the recovery does not spread beyond the infrastructure sector, but any package should be oriented to social rather than construction outlays.
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©OECD Observer No 274, July 2009