Growth momentum to be sustained

The high oil price, security conditions and vagaries of weather continue to remain major shocks to the economy. Structurally infrastructure contracts, human resources and managerial problems in the public sector as well as low productivity in agriculture remain priority concerns, states the 2006 annual report of the Ministry of Finance and Planning.

According to the report fiscal vulnerability to security expenditure and performance of public enterprises needs to be closely monitored. In the midst of many challenges, risks and uncertainties in economic performance still remains below its potential growth in excess of 8 percent. The projected economic growth in 2007 is 7.5 percent given the difficulties in exploiting potential output growth in tourism and fisheries.

The report says that, however, the agriculture, industry and services sector are expected to sustain the growth momentum achieved in 2006.

Due to the tight monetary policy, prevailing high interest rates and supply side improvements inflation is expected to moderate below 10 percent in 2007.