Following a deep recession associated with a strong global downturn, Mexico is experiencing a robust recovery, with GDP growth of 5½ per cent in 2010 and 4½ per cent in 2011. Export growth is expected to slow after the exceptional rebound of 2010, but stronger domestic demand should keep the recovery on track. Several labour market indicators have improved, although unemployment is decreasing only slowly. Mexico has already started to withdraw the fiscal stimulus of 2009 and increased taxes to calm market worries about fiscal trends. If the recovery unfolds as expected, the government should fully implement its plans to lower the budget deficit further through spending restraint. Since inflation has come down, monetary policy can support the recovery by keeping rates low in the near term.