The more positive side of the economic cycle provides in fact a fitting opportunity to procede further with fiscal consolidation, as well as with the necessary reforms of the structure of fiscal expenditures and revenues. Developments in the external balances of the countries in the region provide a sobering reading.
Current account deficits have increased over the last three years, and stood, for the region as a whole above 8% of GDP in 2003. While these deficits may partly stem from a natural and welcome recapitalisation of the economies in the region, fast credit growth may have contributed to exacerbate the current account deficits in a number of countries.