Current Account Poses Risks To Stability

May 2006 | Economic Outlook

Economic data releases for the first few months of 2006 has made fairly gloomy reading for the government. Growth appears to be slowing from the breakneck speed in 2005 - which is bad news for unemployment - while the sharp rise in inflation to 8.8% in April more or less eliminates the chances of another cut in interest rates for the time being. However, the key concern is the rising current account deficit, which looks set to balloon further, casting a shadow over assumptions of economic stability.

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