The reforms also address the issue of corruption and seek to improve governance in both the private and the public sectors. We are introducing laws to make our central bank independent and to ensure fair competition. Finally, the political situation is stabilizing, with a clear timetable in place for the transition to a democratically elected parliament and the election of the President. While the medium-term outlook remains uncertain given the severity of the crisis, our objective is to restore sustainable economic growth with low inflation as quickly as possible. We tentatively expect that the decline in output will bottom out by early next year and that significant positive economic growth will resume no later than the year 2000.
Inflation is to be reduced to a single digit annual rate within no more than two years.
This fiscal retrenchment is to be achieved through action to better target subsidies to the needy, improve revenue performance and streamline public expenditure management. The recovery of output will also help to strengthen the fiscal position. The overall balance of payments position has been strengthened by the additional external financing recently secured and by the agreements related to foreign bank debt reached in Frankfurt. Outstanding external debt and the debt-service burden, though high, are expected to decline steadily in terms of GDP over the medium term as the economy recovers. The process of regaining growth and of restructuring our economy, so that it becomes more efficient, competitive, and equitable, has obvious benefits but also involves major costs.