Economic growth is expected to remain strong, reaching more than 6% per year in 2006 and 2007, with some shifting of the stimulus from domestic to external demand. While strong growth is projected to generate employment gains, unemployment is likely to remain relatively high. Further tightening of monetary policy is likely be necessary to ensure that the inflation target is met in 2007, while further labour market reforms would improve the capacity of the economy to generate more employment without raising inflation. Greater fiscal consolidation would help damping inflation while reducing the risk of deteriorating competitiveness.