GDP growth is expected to reach 2.5% in 2006 before slowing slightly to 2.2% in 2007, with the main support stemming from a strengthening of exports. Higher employment growth will be accompanied by increasing labour force participation and continuing immigration inflows so that unemployment will nevertheless remain high by historical standards. The fiscal deficit will increase in 2006 reflecting the full impact of recent tax reforms and increases in spending. To achieve the planned deficit reduction in 2007, the envisaged public administration reform should be fully implemented.