11 February 2005 -

Report Summary


The December current account deficit was USD 3 bn, as expected (more than 1% of GDP in one month). The annual current account deficit of USD 8 bn, on the other hand, was double the original forecast. Market participants received the revisions of official deficit forecasts without complaint, as capital inflows remained high. Watching the currency move in one direction only encouraged market participants to believe that there was no need to worry about the current account deficit.

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