GDP grew by 5.4% in 2007, the fastest pace of expansion since 2004, but is expected to decelerate over the projection period. Private consumption continued to be the main driver, aided by improving labour-market conditions and still robust credit creation. Investment rebounded strongly, helping to alleviate emerging capacity constraints. Exports are performing well, despite a strong real. The trade surplus is shrinking fast due essentially to rising imports, especially of capital goods and intermediate inputs. Energy and food price hikes have pushed inflation up well above the 4.5% central target.