Economy remains positive

The economy is showing a positive picture at the end of May. The indicators in the Business Cycle Tracer are still concentrated in the high economic growth stage (green quadrant). This means that growth is increasing and above the long-term average for most indicators.

In May consumer confidence shows only a very small change. Consumer confidence has retained the upward trend of recent months in May. Producer confidence in the manufacturing industry decreased in May, but is still positive. Companies in the business services sector expect more orders and higher turnover in the second quarter.

The economy saw robust growth in the first quarter of 2006. The gross domestic product (GDP) was up by 2.9 percent on the year before. It is the highest growth rate in over five years. After correction for working day patterns and seasonal effects, the volume of GDP was 0.2 percent higher than in the fourth quarter of 2005. The quarter-on-quarter growth is clearly less than in the previous three quarters.

Exports contributed substantially again to the economic recovery. The increase in household consumption was another major impulse. Investments were up as well.

Prices in the manufacturing industry in April increased by 1.6 percent compared to March. The capital market interest rate of the latest 10-year central government loan rose further and came to 3.9 percent. Inflation rose by 0.2 percentage points to 1.2 percent.

Unemployment fell further in the period February-April. The recovery in employment continued in the first quarter of 2006. The number of vacancies remained high. In the fourth quarter last year there was a further increase of the hours worked in temp jobs.

Gross domestic product