IMF Staff Country Reports

The authorities’ program for 2003–05, supported by the previous Stand-By Arrangement (SBA), successfully stabilized the economy despite difficult conditions. A new economic program for 2006–08 is needed to consolidate macroeconomic stability, address remaining vulnerabilities, and create the conditions for higher growth. In the context of a benign environment, inflation fell significantly to 2¾ percent in 2004—the lowest inflation rate since the early 1970s. The return of capital flight in 2004 satisfied increases in the demand for money and generated a rapid growth of monetary aggregates.