The economy has experienced extremely rapid growth in demand over the three years to 2005 that is to a certain extent cyclical. While GDP growth picked up to 8½ per cent over this period, supply has not been able to match demand, despite impressive increases in investment. As a result, the current account deficit has widened to around 3% of GDP, though inflation has remained below 5%. Some slowing of output growth seems likely in 2006 and 2007 as the impact of higher interest rates, tighter fiscal policy and a possible unwinding of petroleum products subsidies is felt. The government has continued a policy of gradual reform of product markets with further unilateral reductions in tariffs, reductions in the preferences given to small companies and the beginnings of a rationalization of indirect taxation by moving towards the introduction of national value-added tax. Further progress in the area of energy policies (both for electricity and petroleum), privatization and labour market reform will be needed to sustain longer-term growth.