Macroeconomic Policies 2021-2023 (PDF)
Document Details
Uploaded by CheeryStonehenge
Tags
Summary
This document discusses the impact of recent macroeconomic policies on domestic and external imbalances in 2023. It highlights a reduction in GDP growth and inflation, as well as moderation in credit growth and the current account deficit. The analysis considers factors like a slowdown in domestic demand and increased regulatory prices.
Full Transcript
Appropriately tight macroeconomic policies over the last two years have allowed for an impressive reduction in domestic and external imbalances that had built up during 2021-22. Real GDP growth is estimated to have slowed to 1.2 percent in 2023 from the post-pandemic unsustainable high levels, led b...
Appropriately tight macroeconomic policies over the last two years have allowed for an impressive reduction in domestic and external imbalances that had built up during 2021-22. Real GDP growth is estimated to have slowed to 1.2 percent in 2023 from the post-pandemic unsustainable high levels, led by a slowdown in domestic demand. Meanwhile, inflation has fallen from its peak of 13.3 percent (y/y) last March to 8.4 percent (y/y) in January this year, notwithstanding the effects of the significant but necessary increase in regulated prices. Credit growth has also moderated from its peak of 18 percent (y/y) in August 2022 to 3 percent (y/y) in December 2023, owing not only to tight macroeconomic policies, but also higher provisioning requirements for consumer loans, and tightened lending standards. Finally, the current account deficit is estimated to have narrowed sharply to below 3 percent of GDP in 2023, from over 6 percent in 2022, owing to lower imports and strong tourism receipts, despite less favorable terms of trade.
