A new economic expansion has begun, driven by domestic demand, and growth is projected to exceed 5 per cent per annum by 2005 as work on the major aluminium-related investment projects gathers momentum. Inflation is likely to move to the top of the official target range. The challenge for policymakers will be to restrain domestic demand and avoid overheating at the peak of construction activity in the middle of the decade, through timely monetary and fiscal tightening. Government plans to cut taxes from 2005 should be reconsidered if the intended slowdown in public spending growth is not achieved. In any case, official interest rates will need to be raised substantially, probably in the not-too-distant future...