The sharp slowdown in economic activity since 2000, which is mostly attributable to developments in the financial sector, appears to be partly structural. The exceptionally buoyant international equity market conditions that boosted growth in the 1990s are unlikely to return any time soon. Even so, trend growth is still likely to be high enough to require continued net inflows of foreign workers. This means that important issues related to high inflows of foreign labour remain in education, transport and housing policy while the authorities now also have the challenge of implementing policies that facilitate adjustment to lower growth than in the 1990s. In particular, growth in public expenditure needs to be reduced to stabilise it as a share of GDP and adjustments are required to the parameters of the pension scheme to make it sustainable. At the same time, a variety of reforms to increase participation rates and productivity growth are needed to attenuate the decline in national income growth.