Real GDP grew by 4.9 percent in 2005 and continued to grow strongly in 2006. High growth was driven by strong domestic demand, with private consumption and investment spending supported by low interest rates and improved sentiment.
Household consumption was also boosted by rising incomes and wealth effects from buoyant housing and stock prices. After a slowdown in late 2005, partly reflecting temporary supply shocks, real GDP grew by 4.2 percent in the first quarter of 2006.
The strong pace of economic activity led to higher employment. Total employment grew by 5.7 percent in the year to September 2005. However, the unemployment rate remained broadly unchanged at 26.7 percent, as labor force participation rose significantly.
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International Monetary Fund
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