FMI: In 2001-03, fiscal and monetary polices succeeded in attaining the disinflation target. Privatization accelerated, employment in SOEs was reduced substantially, and utilities' collection rates improved. However, rapid credit growth and an excessive minimum wage increase in 2003 led to a widening of the external current account deficit and prevented faster disinflation. The business climate improved owing to greater macroeconomic stability, strengthened transparency of the tax system, and progress toward EU accession, but remained adversely affected by governance issues.