Key developments and challenges

Growth was robust last year but is declining in 2012, mainly as a result of the eurozone crisis. Economic growth exceeded 3 per cent once again in 2011, despite significant external pressures. However, various indicators in 2012 suggest a sharp slow-down in economic activity, and vulnerability to spillovers from the eurozone crisis is likely to remain present for some time.

Important steps have been taken to protect the banking sector. These include measures to allow foreign bank branches to be converted into subsidiaries and new legislation to allow for the establishment of a bridge bank. So far, the banking sector has coped well with the pressures from the eurozone crisis.

Plans to increase hydropower capacity through private sector involvement are advancing. The authorities have put a number of generation companies up for sale and have issued public-private partnership (PPP) tenders for new facilities.