Our upward revision to growth in the US in 2003 and 2004 since July reflects a stronger than expected outcome for investment in the first half of 2003 and a surge in government spending associated with the Iraq war. Private sector investment rose by 1.7 per cent in the second quarter of 2003, pointing to consolidation of the investment recovery that set in towards the end of last year. Investment in computers and peripheral equipment registered particularly strong growth of 4.4 per cent. Federal defence spending rose by 9.9 per cent in the second quarter and government expenditure projections for the second half of the year and 2004 include the $79 billion supplemental budget approved in the summer to fund the war in Iraq, but do not include the additional $87 billion request currently under negotiation.