MERCOSUR Report No. 3 (1997)

During 1997, MERCOSUR countries again experienced both an acceleration in their economic growth rates and a reduction in inflation rates. This favorable performance was accompanied by an improved fiscal position and the stabilization of real exchange rates. Given that exchange policies in MERCOSUR countries play a central role as inflation-control instruments, the stabilization or improvement of real exchange rates is good news for the future development of external disequilibria. This is a particularly important issue given the recent deterioration in the current account balances of all member countries.