Export Recovery and Tax Reform Accelerating the Pace of Growth. Economic Outlook for 1999 and 2000

Driven by a recovery of exports and industrial output, economic growth has been gaining momentum since mid-1999. Rising private consumption continues to give firm support to the business cycle; next year, the tax reform and higher family benefits will provide additional stimulus to private household spending. Growth of real GDP is projected at 2.2 percent for the current year, accelerating to 2.8 percent in 2000. Price stability will be maintained, despite a substantial rise in oil prices. The strong advance of domestic demand is accompanied by sizeable employment gains which, together with a reinforcement of labour market policy measures, will bring down the rate of unemployment to 4.2 percent next year. General government net borrowing is set to increase to a ratio of 2½ percent of GDP.