Economic growth is beginning to recover and should reach around 2¾ per cent in 2005 as the international economy recovers and business investment strengthens. Meanwhile, unemployment is likely to remain above 8 per cent and inflation to fall below 1½ per cent in 2004-05, mainly reflecting significantly lower increases in unit labour costs. The government should continue to take the steps necessary to ensure that the budget remains balanced. This is important to maintain confidence in its debt-reduction strategy, a central element in preparing for population ageing. This should be supported by further reductions in the tax burden on low-income earners and in incentives for early retirement...