Sound growth but imbalances remain
Overview:
Economic growth has proved stronger than expected. Strong tourism receipts and buoyant exports will see GDP growth having bettered expectations both in 2010 and 2011. However, the recovery remains unbalanced with problems remaining to be resolved in certain parts of heavy industry and in the banking sector. Moreover, the outlook for growth is worsening given the deteriorating situation in the world economy. The government is tightening fiscal policy which will help to stabilise public debt at reasonable levels. The current account deficit has halved but remains massive. The authorities need to push through reforms to the labour market to keep the economy competitive. A start date for EU Accession negotiations may be delayed as some members believe more must be done to clamp down on corruption.