1. Adherence to the program under the Stand-By Arrangement continues to result in strong economic performance. Growth has accelerated beyond projections, inflation is expected to remain within the annual target, and progress has been made to further diminish vulnerabilities. All end-September quantitative performance criteria were met. The authorities’ reform program stresses the need to enhance competitiveness and improve the business climate, with the aim of ensuring sustained and equitable growth and facing the demands arising from greater trade openness. Delays in reform implementation are due solely to unexpected or technical factors—as explained in the authorities’ request to reschedule the 2004 structural performance criteria—but the authorities’ commitment remains intact. The domestic political debate is considerable, but the authorities’ determination to push ahead with consistent policies is proving to have a much greater impact on market confidence. The recent approval by Congress of a constitutional amendment for the elimination of the preferential public pension regime reflects their ability to muster consensus around the main features of the reform program.