Having said that, the recent flow of economic data provides some grounds for cautious optimism. The recovery is being led by developments in the external sector. What we are seeing is a substantial improvement in our competitiveness - we are pricing our way back into foreign markets. This is generating higher exports and boosting inward direct investment. Last year exports increased by 9.5% which was the strongest rate of growth in a decade. In other words, we are beginning to trade our way out of recession. While the outlook for the external sector remains bright, domestic demand conditions are likely to remain muted and flat, at least in the short-term. Over time, sustained strong export growth will help raise overall employment levels and I hope put unemployment on a downward path.

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