Still awaiting a political compromise
Overview:
Economic data suggests that the recession is over. Industrial output and exports are expanding. The recovery is likely to continue to be weak, however, as domestic demand remains soft and fiscal tightening will slow growth other things equal. The current account deficit is relatively contained but may start to grow as domestic demand picks up. Increasing bank credit may be the first indication of this. Inflation is low but rising slightly on the back of higher food and fuel prices. A modest improvement in the economic situation contrasts with a continued political stand-off between those that seek to maintain a decentralised state and those looking for greater power for State-level institutions. Following October elections, governments have been formed at the Entity level but not yet in the State parliament.