Government and National Bank announced their macroeconomic prognosis for 2006. The GDP growth is expected at 8.3% year-over-year (9.4% in 2005), growth of industrial production will accelerate from 4.6% y/y in 2005 to 7.3% y/y in 2006. In agriculture the increase of output will decelerate significantly to 2% y/y in 2006 compared to 6.7% in 2005, and the capital investment advance is forecast to drop by 4.1 percentage points y/y to 18% in 2006. The value of exports is seen at US$29.1 billion (US$27.8 billion in 2005), while imports are expected to reach US$23.1 billion compared to US$17.4 billion in 2005.
This means that the foreign trade surplus will be lower than last year. The authorities forecast that the annual average inflation will be in the 5.7 – 7.3% range, which means a deceleration from the 2005 indicator, which was 7.6% y/y. We consider that target is possible to achieve, but the government needs to implement measures to curb inflation, which already made up 2.5% eop last month. Budget deficit is estimated at 1.4% GDP and the real wages are expected to rise by 7.8% in 2006.