A virtuous cycle of fiscal stabilisation, interest rate declines and increasing confidence should help maintain GDP growth on a strong path. After increasing by 5 per cent in 2003, GDP may decelerate slightly in 2004 as a result of adjustments in stockbuilding, but should rebound in 2005 provided that positive expectations are maintained. The authorities should stick rigorously to the fiscal stabilisation and structural reform programme, pursuing the primary budget surplus target and implementing the new policies regarding social security, banking, privatisation and foreign direct investment. A firm policy stance in the face of pressures emanating from the local elections in spring 2004 would help to preserve the crucial momentum of positive expectations...