GDP growth picked up in the second quarter and has remained close to trend over the course of the summer after an initial dip in the first quarter of the year. Preliminary estimates of GDP suggest the economy expanded by 0.6 per cent in the third quarter of 2003. The recovery of growth from the relative weakness observed throughout most of 2001 and 2002 has arrived somewhat earlier than we thought at the time of our July forecast. GDP growth was revised upwards from 0.1 and 0.3 per cent per quarter in the first two quarters of the year to 0.2 and 0.6 per cent per quarter. Chart 1 shows our forecast of quarterly GDP growth to the end of 2004. We expect growth to remain close to trend over this period. For this year as a whole our central projection shows the economy expanding by 2.0 per cent this year and by 2.6 and 2.7 per cent per annum in 2004 and 2005.