Employment growth is, however, unlikely to be strong enough to reduce the unemployment rate much from the current 8.4%. Headline inflation should fall back almost to the underlying rate of 1.6% by 2007.Further fiscal consolidation measures, focusing on expenditure restraint, should be implemented to build on progress made in moving public finances towards a sustainable path. The government aims to maintain the budget in balance in 2006 and to achieve a small surplus in 2007. Reforms to lower benefit dependence and increase employment rates, especially for older and younger workers, are vital as they reduce the amount of consolidation required for the sustainability of public finances.

Population (000s), 2004	10 399
Area (000 sq km)	31
Currency	Euro
GDP (Billion USD), 2004	352.3
Life expectancy at birth (Women, Men), 2002	81.1, 75.1
Total labour force (000s), 2004	4 561
Government type	Constitutional Monarchy

Indicators	% change unless otherwise indicated
	2005	2006	2007
GDP growth	1.4	2.0	2.2
Household savings ratio	10.8	10.3	10.4
Consumer price index	2.6	2.4	1.7
Short-term interest rate (%)	2.2	2.2	2.9
Unemployment rate (%)	8.4	8.5	8.4
General government financial balance (% GDP)	0.0	-0.4	-0.7
Current account balance (% GDP)	1.4	0.8	1.0

Source: OECD© OECD Observer, No. 252/253, November 2005