The decline in demand for domestic production, then, affects output more than if the economy were more open. I called attention to this matter in an article I wrote for the Financial Times in early 2012. The third reason that economic contraction reached unprecedented levels concerns the implementation of structural reforms, privatization, and measures to improve tax collection.
The output gap, as shown in the left-hand side of Chart 15, has remained positive, reflecting improvements in the capital stock and labor markets. Recently, however, it seems that it is no longer on an expanding trend.