Strong growth will continue into 2013 and 2014. Investment in the petroleum industry will give way to consumption as the main source of demand growth for the mainland economy. External demand will initially be very weak but recover somewhat in 2014. Demand for labour will remain buoyant. Low import prices and exchange rate appreciation have helped to keep inflation low, but it will rise through 2014.
The authorities should continue to keep the structural non-petroleum budget deficit below 4% of the value of the Government Pension Fund Global. Despite guidelines on mortgage lending, house price growth has accelerated; the vulnerability of households to credit shocks should be monitored.