Thirdly, we have preserved the value of our dollar, protecting the value of people’s savings, and providing more predictable returns for investors. Fourthly, we have reserves which are more than sufficient to ride out the storm, as may be seen in Figure 2. With these resources we may confidently address the challenges, which are twofold.
The first is to balance foreign exchange inflows and outflows. Following the June 27th Economic Consultation, Government is in discussion with the social partners on measures that will be introduced to reduce the fiscal deficit. The required adjustment is considerable, about 4.5% of GDP, but not sufficient to cause major social disruption, as may be seen in Figure 3.