This perspective raises the issue, which I will return to later, of whether the negative consequences of the decline in intermediation required both of these elements to be present. Estimating mortgage-credit losses The paper performs a very useful function by providing estimates of the credit losses likely to be realized on the current stock of outstanding loans.
However, overall domestic demand growth remained subdued as a result of the protracted weakness of investment. Looking ahead, the most likely scenario is that of ongoing, albeit modest, growth in real GDP in the second half of this year, with growth rates in line with potential growth in 2003.