Positive economic development requires “less destructive political climate”, says World Bank
07 Dec 2010, 4:49 PM
A strong rebound in tourism and government policy efforts to redress macroeconomic imbalances have stabilised the macroeconomic situation and spurred growth in 2010, but a fractious political environment and accelerating international commodity prices remain key challenges, according to a World Bank Economic Update Report published last week.
The report notes that fiscal consolidation – reigning in the ballooning budget deficit with austerity measures and the introduction of taxation on business profits – “remains the foremost challenge in the coming years”.
“A less destructive political climate” will be needed to maintain recent positive developments, the World Bank cautions.
“Despite having posted better-than-expected fiscal results in the first half of the year, the country will be hard-pressed to sustain this in the medium term,” it reads. “However, despite the challenges, the government remains steadfastly committed to fiscal consolidation.”
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