Euroframe expects a GDP growth rate of 2.5 percent for the euro area in 2007. Domestic demand will become the main pillar of growth; exports will be slightly dampened by the US slowdown and the appreciation of the euro. For 2008, a marginal slowdown of GDP growth to 2.2 percent is expected. The improvement in the economic environment in the euro area has been reflected in the labour market and in the fiscal deficit. The rate of unemployment is expected to fall to 7.2 percent in 2007 and 6.8 percent in 2008. Despite the favourable outlook for the labour market and the resulting higher wage pressure, the inflation rate will remain at about 2 percent. Euroframe – European Forecasting Network – comprises ten of the most respected forecasting institutes in Europe, including WIFO. On behalf of the European Commission, Euroframe produces economic forecasts for the euro area twice a year.