The economy is growing rapidly, propelled by strong household spending. Activity is projected to keep expanding robustly with a mild slowdown in growth from 5% in 2007 to 4.5% in 2008 as the boost that temporary factors are giving to demand fades. Inflation is projected to remain above the euro area average.
Fiscal and regulatory policy should focus on keeping inflation in check. The budget should prioritise spending items that alleviate bottlenecks in the economy, such as investment in human and physical capital, and refrain from fuelling consumption. Boosting competition in network industries, especially in the electricity and natural gas sectors, is becoming a matter of urgency as these sectors contribute disproportionately to inflation.
|Population (000s), 2005||4 131|
|Area (000 sq km)||70|
|GDP (Billion USD), 2005||161.9|
|Life expectancy at birth (Women, Men), 2003||80.7, 75.8|
|Total labour force (000s), 2005||2 015|
|Indicators||% change unless otherwise indicated|
|Consumer price index||2.8||2.8||3.0|
|Unemployment rate (%)||4.4||4.4||4.4|
|General government financial balance|
|Current account balance (% GDP)||-1.7||-1.3||-0.4|
No. 258/259, December 2006