Recent Economic Developments, 104

Overview:

In the second half of 2003 (the period reviewed) business sector activity showed signs of recovery, based on a rise in exports and private consumption. The increase in demand seems to have gained strength in the fourth quarter, with most of the economic indicators available at this stage pointing to a faster rise in that quarter than in 2003:III. Nevertheless, despite signs of a turnaround,
manufacturers’ behavior showed their uncertainty regarding the strength and stability of the improvement. The GDP growth rate—1.2 percent in the whole of 2003, of which 0.8 percent was in the second half of the year— is below the growth that could have been achieved with the stock of capital and labor, so that the output gap (the gap between potential and actual GDP) widened. Per capita GDP fell for the third successive year.

Link to File