A narrowing in the current-account deficit is expected over the remainder of 2006 as oil prices and import volumes ease and as exports pick up, the Treasury said in its Medium-Term Budget Policy Statement (MTBPS) on Wednesday.
The Treasury said that a deficit of 5,7% of GDP was expected in the current year, with the deficit projected to average 5,6% over the medium term.
In February a current account deficit of 4,4% was projected for 2006.
The Treasury said a more competitive currency would support increased exports, as well as the continued relative strength in commodity prices and international growth.
Export growth is projected to average 6,4% to 2009, with export growth expected to be at 6,5% in 2007.
The Treasury added that although growth in import volumes was expected to slow somewhat in 2007 as domestic demand eased, it was expected to remain in line with higher investment growth and sustainable levels of domestic demand. — I-Net Bridge