Remaining countries in the EU are moving ahead. Consumer price inflation, the bugbear of the economy, had to drop below three percent in 1998, sinking to two percent a year later, Mr. Simitis said in a written copy of his speech released to reporters. Although the socialist government had managed to cut inflation to roughly 5.5 percent from 8.5 percent a year ago, tight fiscal and monetary policies had to stay in place in order to drive it down further, Mr. Simitis said.
Inflation is currently a critical problem for economic policy.
Its containment to two percent in 1999 requires hard work and an appreciation of just how crucial the matter is. The cut would represent eight percentage points against 2.6 points for other countries. The rate of GDP growth, estimated at 3.5 percent for 1997, is forecast to rise to four percent in 1998, according to government officials. In addition, average real wages rose in 1994-1997 by 2.7 percent, or the same as the average rate of GDP growth in the same period. In 1997 real wages increased by 3.5 percent, the same as GDP growth.