Strong consumer spending underpinned a pick-up in growth to about 3 per cent in 2003. Growth is projected to rise progressively further to about 3½ per cent in 2005, due inter alia to strong exports as capacity based on foreign direct investment comes on stream. Layoffs from the still large number of domestic enterprises in need of restructuring will entail continuing net declines in employment this year, though it could stabilise in 2005 as new job creation picks up. The introduction of a legally binding multi-year budgetary framework focusing on output performance rather than financial inputs would help to achieve the intended fiscal consolidation. Monetary policy needs to stay vigilant and make sure that policy-related one-off price changes do not feed into inflationary expectations, by taking early action if necessary...