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The economy is projected to continue its robust expansion through 2013. Private consumption and investment will rise appreciably, supported by fiscal and monetary policy. Exports will benefit from their concentration on relatively strong economies in Europe and Asia. Higher activity and commodity prices are likely to lift consumer price inflation from its currently low level.

With monetary policy facing very low interest rates abroad and potential exchange rate pressure, the authorities should keep the structural non-oil budget deficit below 4% of the assets in the Government Pension Fund Global. Imbalances in asset markets, particularly high house prices and household debt, need to be addressed with macro-prudential tools and through consumer protection legislation.