1. The following information has become available since the staff report was prepared. These developments do not alter the thrust of the staff appraisal.
2. The inflation rate fell to 1.4 percent in May 2003 (on an end-period basis).
3. Broad money growth fell to 11.1 percent in April 2003 (on an end-period basis).
4. Preliminary data indicate that net international reserves fell by € 3.9 million during the period December 31, 2002 through June 9, 2003 and were, on June 9, about € 0.7 million above the end-June performance criterion, adjusted for the shortfall in budget support (the authorities have not yet drawn on the € 5.0 million Portuguese line of credit, which was programmed for the second quarter).
5. The authorities informed staff that the Council of Ministers approved the VAT pre-registration decree and that the preliminary report of the audit of Electra (the water and power utility) has been completed.